Saturday 21 May 2011

The cost of Procrastination and Politeness

Last year my Aunt died unexpectedly, and my mother found out that under German inheritance law she needed to sign a form disclaiming her automatic right to half of her sister's estate, so it could all pass on to my Uncle. She was happy enough to do so, and my Uncle informed her (in a phone call) that he was going to leave "everything" to her, as he had no close blood relatives.

Then last month my Uncle died suddenly soon after returning from a holiday, and my parents had to travel to Germany to make his funeral arrangements, and check through his paperwork. It turned out that he must have never gotten around to writing his will. My mother had never reminded him to put his intentions down in writing (she probably didn't want to bring up this morbid topic during their occasional telephone conversations). So, my mother won't inherit any of his estate - instead it will remain in probate for three years in case any long lost cousin turns up, and then it will all go to "the state".

It seems rather sad that the end result of my Uncle not following up his telephone promise and actually writing down his intentions, and my mother's hesitancy to "follow up" and check that he eventually made out his will, means that his estate will not be distributed as he had intended. Fortunately there isn't a huge amount of money involved (the town-house is worth around $250,000 and there are three used cars, furniture etc. plus whatever he had in his bank account), and there would have been around 50% tax on any inheritance my mother had received, but it still would have been a nice lump sum for a self-funded retired couple in their late 70s to receive.

Goes to show the importance of not "putting off" important tasks that won't really require much effort to complete. And that even though it may be an uncomfortable topic to discuss with elderly relatives, it's important that any intentions regarding bequests are properly documented.

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