Reference no: EM132188400

Estate Planning for Mrs. Judith Jackson

The following is a common example of a simple estate plan for an elderly parent.

A daughter named Tracy, contacts your financial advisory firm about a will for her mother, Judith Jackson, who is a widow and in her early 80s. Her mother does not have any estate planning documents but owns a home which is paid for and has a small checking account at a local bank.

Her daughter Tracy is an only child and helps Mrs. Jackson out with shopping, cleaning the house and making doctor appointments. As daughter says, "Mom is starting to slip a little bit but is pretty healthy."

The first appointment is at your office and you are trying to determine whether Mrs. Jackson is competent to create an estate plan, but also to make sure that the presence of daughter Tracy Jackson has no influence over her decisions. Therefore, you meet with Mrs. Judith Jackson alone in your conference room.

You spend the first 15 minutes or so just trying to get a feel for how well Mrs. Jackson is doing mentally and physically and what she wants with her estate plan. She is very clear that Tracy should get everything and doesn't want to be a burden for her daughter. Mrs. Jackson is pretty sharp but has momentary lapses where she forgets information...dates, places and so on.

Mrs. Jackson wants to stay at her home and based on her health, that should not be a problem for now. Since her income consists of only a small pension and Social Security, Mrs. Jackson's savings are dwindling, but she still has about $150,000.

The goal is to prepare a proper estate plan for Mrs. Judith Jackson. Issues include;

1. Does Mrs. Jackson need a Will? Who will receive Mrs. Jackson's assets and personal belongings?

2. Does Mrs. Jackson need a trust? If so, does she need a revocable or irrevocable trust?

3. Who will be in charge of Mrs. Jackson's healthcare matters?

4. Does Mrs. Jackson need a healthcare directive? Should Tracy be in charge of the healthcare directive if she is also the sole inheritor?

5. What can Mrs. Jackson do to avoid probate?