Have you prepared a living trust or a will? If not, then you are not alone. A Caring.com survey estimates that only 42 percent of American adults have put together their estate planning documents. This is pretty startling considering what can happen if your estate falls into probate. Take the case of famous Texas real estate magnate James Cotter for example.
It was January 25, 2017 when James Cotter passed away due to cardiac arrest—he was 83. Only a year before he passed, the man’s estate was estimated as being worth $288 million. Now, his family, his estate administrators and the probate court just aren’t sure what to make of his estate.
Upon his death, Cotter reportedly had $181.7 million in debts, taxes and other liabilities. This should have left around $106 million to his descendants and heirs. But the issue of Cotter’s estate was not that simple.
In 1981, Cotter allegedly wrote a handwritten will that was provided to the court by his children. However, the man’s third wife—to whom he had wed in 2012—insisted that there was a more recent will. The court has refused to recognize the handwritten will, and the updated will claimed by Cotter’s third wife has yet to be found.
Without a legally binding will, the probate judge assigned an independent administrator for the estate, and what he found was chaos. Several properties owned by the magnate were deep in debt, so much so that some were forced into bankruptcy to prevent foreclosure. Next, some of the valuations of Cotter’s holdings turned out to be speculative. Meaning that his assets could be worth far less than previously thought. Furthermore, his estate tax bill could be around $30 million.
Over a year and a half after Cotter’s passing, the estate judge is still sorting through the estate as best he can. However, this probate case could last for another year at this rate. When clear, legally binding estate plans don’t exist, families must endure the often drawn out process of probate. To ensure that your estate plans endure after you’re gone, contacting an experienced estate planner may be the best option.