Estate Planning

Case Narr ative

Ellen Waters and Ed Expo

Ellen, age 68, is contemplating marriage to Ed, age 38. Ed is a handsome man with many

attributes that women find appealing. Ellen, although older, is still quite attractive for her

age. H owever, Ellen som etimes fin ds other younger w omen glancing at Ed ; she finds this

disconcerting and worries that someday, maybe soon, Ed will leave her for a younger

woman.

It is unlikely that Ed would ever do such a thing. Besides having professed great love for

Ellen in his marriage proposal, it is also an established fact that Ed has potentially much

to gain from this marriage. Fou r years ago he w as divorced from his first wife after a

lengthy bankruptcy filing. Although the bankruptcy filing stopped creditors from

harassing him, he has recently received calls from creditors about bills that he is either

late on curren tly or ha s just failed to pay . He has no children of his ow n. H e curre ntly

works as a law n and supply stocker at H ome D epot w here he ea rns about $9.50 per hour.

He has no assets other than a 1991 Ford F -150 with 125,000 miles.

Ellen is a self-made woman. Five years ago she sold her cosmetics company that she

started in the 1960s with her now deceased husband. The proceeds of the sale included

approximately $4,500,000 in cash and stock worth $3,000,000. Ellen has four grown

children and two grandchildren by her first son. Although not a close family, Ellen

would like for her children to share equally in her estate when she dies. She would also

like to leave a legacy for her grandc hildren, both living and yet u nbo rn, to pay for college

expenses. If she marries Ed, as she thinks she will, she would like for his needs to be met

during his lifetime, unless he has an affair while she is living, regardless of her health or

incapacities, or if he remarries within three years of her death.

Ed has recently been reading financial planning books. He has concluded that avoiding

probate is a good thing to do. He has su ggested that he and E llen place the bulk of th eir

assets in joint tenancy with the right of survivorship. He also wants to have a general

power of attorney for Ellen beginning at the time of her incapacitation or when she turns

age 70, whichever occurs first. He has suggested to Ellen that she need not have a living

will but rather a health care proxy with Ed as the proxy. Ellen agrees with Ed that her

house sh ould be retitled as joint tenants with right of survivorship shortly after they a re

married. This question, along with the others in the case assignment, has prompted Ellen

to seek your advice about what steps sh e should take next. Please help her.

Ellen and Ed’s estates presently consist of the following assets and liabilities.

Property

Checking & Savings Accounts

Checking & Savings Accounts

Money Market Account

Mutual Fund

Stock (from sale of business)

Vacation Home

Paintings

Vested Profit Sharing

Furniture & Household Goods

Jewelry & Gems

Automobiles

Pick-up (Ford F-150)

Life Insurance

Primary Residence

Mortgage on Residence

Debts

Car Loan

Unpaid Medical Bills

Expected Funeral & Estate Expenses

Owner

Ellen

Ed

Ellen

Ellen

Ellen

Ellen

Ellen

Ellen

Ellen

Ellen

Ellen

Ed

Ellen*

Ellen

Ellen

Ed

Ellen

Ellen

Ellen

Value

$16,000

$250

$4,530,000

$60,000

$3,000,000

$155,000

$300,000

$95,000

$55,000

$75,000

$45,000

$2,200

$800,000

$220,000

$23,000

$24,000

$15,000

$20,000

$40,000

*Ellen is both the insured and the beneficiary.