Q. My lifelong friend, Bruce, is in his 70’s and has never been married and has no children. His parents and his sister and brother have predeceased him, and he has no nieces or nephews. On his father’s side, he has a cousin, Steve, who he has always been very close to – they grew up together and are more like brothers than cousins. On his mother’s side he has twelve second cousins, most of whom he never met because his mother had a “falling-out” with that part of the family when before Bruce was even born. Bruce owns a home worth $500,000 in Northern Virginia and has some savings and investments. However, Bruce is stubborn and every time I suggest he should do Estate planning, he says he doesn’t need to. Bruce (who went to one year of law school) says he’s certain it will automatically all go to his cousin Steve (which is what he wants) since Steve is a first cousin, and that nothing will go to the second cousins on his mom’s side because they’re second cousins. Because of this, Steve says he doesn’t need to do any Estate Planning. He’s so sure about this that he was even willing to bet me money that he was right. I’m not a better, plus I have no idea whether he’s correct of not, but I did agree to a “gentleman’s bet” just so we can find out the answer. Can you please help us settle our gentleman’s bet?
A. Despite his one year of law school, Bruce is wrong in assuming that everything will to go to Steve. On the contrary, if Bruce dies without having done Estate Planning, then half of Bruce’s estate will go to Steve and half will be divided among his 12 second cousins on his mother’s side – not the result that Bruce wants. Keep reading to understand the details of why this would happen.
When a person dies intestate (without a Will or Living Trust) in Virginia, and has no surviving spouse, children, parents, siblings, or descendants of siblings, the decedent’s estate is divided into two equal parts, called “moieties.” One moiety goes to the decedent’s father’s side and one moiety goes to the decedent’s mother’s side.
The recent Virginia case of Sheppard v. Junes, 2014 Va. Lexis 56, dealt with very issue. In the case, John Sheppard died without a will. Like Bruce, he never married and had no children. His sister and parents predeceased him. On his father’s side he was survived by a half-uncle (i.e., his father’s half-brother); on his mother’s side he was survived by fourteen second cousins.
The administrator of the estate sought advice from a circuit court to determine whether (i) John’s half-uncle was entitled to only one-quarter of the estate because half-bloods under Virginia law typically take half as much as whole-bloods or (ii) John’s half-uncle was entitled to one-half of the estate, because he was the only heir on the paternal side. The circuit court held that John’s half-uncle was only entitled to receive one-quarter of the estate. The Supreme Court reversed and held that John’s uncle was entitled to one-half of the estate because he was the only heir on the paternal side.
The Supreme Court based its decision on Section 64.2-200 of the Code of Virginia, stating that if a decedent has no surviving spouse, children, parents, siblings, or descendants of siblings, the estate is divided into two moieties. Each moiety is entirely separate from the other, and keeps to its own side, as long as there is at least one person to take the moiety. Under the statute, John’s uncle, even though he was only a half-uncle, was entitled to receive the entire paternal moiety, and the second cousins were entitled to the maternal moiety.
The court also reviewed section 64.2-202 of the Code of Virginia, which describes how to distribute the decedent’s estate. The court noted that the statute clearly instructs that the division among the heirs is applied separately to the paternal and to the maternal moieties created under section 64.2-200. Because John’s uncle was the only relative for the paternal side, he was entitled to take the entire paternal moiety, and because the maternal moiety and the paternal moiety were separate, it did not matter that John’s uncle was a half-uncle and not a full uncle.
As you can probably imagine, the court proceedings, time, publicity, and costs involved, were a nightmare for these families, that could have been easily avoided if Mr. Sheppard had simply done some basic Estate Planning.
Many people think that Estate Plans are for someone else — not them. They may rationalize that they are too young or don’t have enough money to reap the tax benefits of a plan, or don’t have any family to leave their estate to. Or, like Bruce, they may incorrectly think that the law will do what they want automatically.
However, Estate Planning is for everyone, regardless of age, marital status, or net worth. Without proper Estate Planning and depending on how assets are titled, half of your friend Bruce’s assets could go to family who he has never met or hasn’t seen in decades, rather than to the one person who he wants to give it to. To avoid all this, it is highly recommended that your friend and others in his situation meet with a Certified Elder Law Attorney to explore their estate planning options to avoid unwanted consequences when they pass.
Estate planning strategies such as those employed by the Fairfax and Fredericksburg Estate Planning Firm of Evan H. Farr, P.C. are extremely valuable techniques for everyone — single or married – and of whatever sexual orientation. Most people work their entire lives to accumulate what they own. Everyone needs the peace of mind that comes with making sure that their legal and financial affairs are taken care of if they become incapacitated, that decisions about health care are carried out the way they’d like even if they’re not able to make them, and that their loved ones are taken care of when that time eventually comes. To begin your Estate Planning or to update your documents, please call 703-691-1888 in Fairfax or 540-479-1435 in Fredericksburg to make an appointment for an introductory consultation.
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