When you see some of the estate planning failures that have been taken by others, you may be motivated to avoid the same mistakes. People sometimes fail to plan ahead for the inevitable because they are under the impression that they are too young to concern themselves with estate planning. While it is obviously true that people in their 30s do not usually pass away, sometimes they do. It is not entirely uncommon for younger people to pass away in motor vehicle accidents. Catastrophic illnesses sometimes strike, and there are those who are the victims of criminal acts.
Longtime NFL quarterback Steve McNair was unfortunately in the latter category. He was killed in 2009 by his mistress when he was just 36, and he left behind a wife and children. He did not have a last will expressing his final wishes. All responsible adults should have an estate plan, but it becomes absolutely essential when you are a married person with children depending on you. You may feel that things automatically fall neatly into place, but this is simply not the case. While Steve McNair did in fact have significant financial resources, his assets were frozen by the probate court because he did not have a will, a trust, or any other estate planning documents in place. His assets were frozen in large part because of his estate tax exposure. He could have taken steps to mitigate this exposure while he was still alive through proper estate planning. The federal estate tax carries a 40% maximum rate so it can certainly play havoc with your financial legacy. Another individual who was victimized by this lack of planning was Steve McNair's mother, Lucille.
McNair was apparently quite grateful to his mother for all the things that she had done for him while he was growing up. During the prime of his career he was a superstar with the Tennessee Titans, and he was in a position to provide his mother with the home of her dreams. He built her a ranch in Mississippi that sat on 45 acres. Lucille looked upon this home as a gift that was given to her by her son. However, the fact is that Steve McNair kept the home in his name. His mother was not the legal owner of the home at the time of his passing. As a result, the home was looked upon as probate property. Steve McNair's widow was named as the personal representative or executor of the estate by the probate court. She demanded $3000 a month rent for the property, and Lucille could not pay so she had to move. It is unlikely that Steve McNair would have wanted to see this outcome. He could have prevented it if he would have taken the time to construct his estate with the assistance of a licensed estate planning attorney.