Taxation & Estate Planning

I was speaking with someone from the Planned Giving Department of the Salvation Army today.  She was relaying the story of a woman who wanted to leave a donation to the Salvation Army in her Will.  She had an old Will that left her money to some nieces and nephews, she also had several bank accounts that named one niece as the beneficiary on the account (the person who was to receive the money upon her death), and she had a hand written note listing who she wanted her money to go to, including the Salvation Army.

Despite her wishes to leave a bequest to the Salvation Army, she never saw an attorney to make sure that her plans would be carried out. 

When the woman died, all of her accounts were automatically payable to the one niece listed as the beneficiary.  The other nieces and nephews listed in the Will inherited nothing, since the funds passed outside the Will.  This has lead to problems in the relationships between the cousins, which could have been avoided had the aunt understood that her Will would not adequately provide for them.  In addition, because she never formalized her plans, there was no money to leave to the Salvation Army.  Thankfully, the niece found the handwritten note and voluntarily made a donation in her aunt's name, but she was under no obligation to do this and there was no guarantee that the niece would have found the note, let alone chosen to make a donation. 

It is good to have a plan in mind, but after you make your plan, you need to see an attorney to make sure that your plan will actually be carried out the way you intended.