The Will From Hell

Dave was one of the nicest blokes I have ever met. A fantastic guy and enough friends for ten men. He had recently remarried and became a proud father for the third time. I had never seen him happier, and deservedly so. We were great mates.

Not long after the birth of his third daughter he was in his office at work one morning preparing for the day ahead. Shortly afterwards two blokes walked in and held him at gun point demanding the keys to the safe. Moments later he was shot dead.

What Becomes of the Broken Hearted
Trying to process the immediate and harrowing loss of a husband and father would have to be the ultimate challenge for any family to go through. The grief I saw his family experience was almost crippling.

Unfortunately the grief, police investigations and protracted court cases surrounding his death was not the end of it. The next challenge was dealing with the Will from hell.

Shortly after he and Stacey married (not her real name) they bought a house and took out a sizeable mortgage which included covering the cost of some extensive renovations. Dave took out some life insurance valued at $100,000 but not enough to cover the cost of the mortgage if anything ever happened.

At around the same time, a friend gifted him a parcel of shares valued at $250,000. Dave got cleaned out following the divorce of his first wife Jane (not her real name) so it was a nice leg up.

When Greed Grows Arms
Dave’s Will basically stipulated that all assets and insurances were to be divided between Stacey and his three daughters. (He had two daughters from the first marriage).

His ex-wife Jane was not to get a crumb. At least that was the intention.

Unfortunately Jane’s partner, Steve, was in trouble with a property development deal that had gone pear shaped. By now they were now in a defacto relationship and Steve had borrowed money against her house to help finance the property deal.

By association, Steve was now within arm’s reach of the money sitting in the estate. And because Jane was under significant financial pressure as well, she pulled out all stops to get her paws on whatever money she could.

All assets in the estate were frozen (for 2.5 years) and somehow Stacey had to find a way to meet her mortgage repayments while processing the worst possible grief ever.

While all this was happening, the value of the $250,000 share portfolio took a sizable dip due to a correction on the stock market.

And with Steve in her ear, Jane became an overgrown thorn in everyone’s side. She challenged everything and needled everyone. Probate became a nightmare and eventually the estate landed in a family law court.

All assets and insurances were thrown into a ‘bucket’ but most of the proceeds were slowly siphoned off in solicitor’s fees. The final balance was then divisible by the four beneficiaries of the estate. It was barely enough for Stacey to buy a second hand car.

So How Could All This Have Been Avoided?
If Dave had a good solicitor, he would have made at least three recommendations for his estate planning:
I.  Write a water tight Will that’s almost impossible to contest.
II. Ensure his superannuation had a non-lapsing death benefit nomination. This is important because super is a ‘non-will’ asset.
III. Write a Testamentary Trust into the Will to protect the children’s benefits. Being a blended family this should have been a no brainer. In estate terms, it’s the equivalent of adding milk to your cornflakes. The Testamentary Trust would have made it impossible for predators like Steve or Jane to get their hands on any monies plus it would have made the estate more tax effective.

Estate planning is one of the most emotive aspects of Financial Planning. Not surprisingly, decisions are pushed back and according to the NSW Trustee and Guardian, 70% of Wills are intestate.

Because Dave was such a great bloke, I reckon he would have been given an express ticket straight to heaven. But if he could have seen the carnage that unfolded behind him, it would have felt like he just landed in hell.

Don’t let it happen to you.

Have a good week.