For forty years, I’ve been helping clients with their insurance plans. An experience in my family made me aware that insurance is not the whole answer. It is just part of the answer. The whole answer, when somebody dies or is sick or hurt, is to preserve continuity through many available means.
Here’s what happened:
My cousin in England died in his 70s. He was single and had no children. He had many very close friends where he lived and was part of a family of some historical interest. He owned a farm in England and a farm in Canada. He had also started a farm and resort in Africa with a non-family-member business partner.
At the time of his death, he had two wills – one in England and one in Canada for his Canadian assets. Unfortunately, there were also English death duties and Canadian capital gains tax to be paid and no liquidity in the estate. When my cousin did his wills, somebody didn’t ask the right questions, or he wasn’t thinking clearly, because he left behind:
- Six different people who owned four different pieces of real estate, any or all or part of which needed to be sold to raise money to pay taxes.
- One property was shared among three people who had conflicting goals and interests.
- Dozens of items of family historical significance were sold by his Executors, never to be seen again by his cousins (from the same family).
- His Canadian farm was willed jointly to a Canadian citizen and a UK citizen, each of whom have vastly different tax considerations which require different handling of the one property – a logistical impossibility.
- His two closest friends in England, were co-Executors, and subject to three years of all-consuming stress and anxiety in dealing with his estate.
- The same Executors were in a potential legal conflict-of-interest because two of their children were beneficiaries of the shared assets and liabilities.
- Tens of thousands of dollars and pounds of legal fees were paid by the estate.
On the spectrum of planning, sadly, this was a very poor job. A simple crash-test would have been enough to alert my cousin to the problems he was going to create for those he left behind.