To die with no plan 
In place may be leaving a 
Gift to journalists

This week, an original story from Block Club Chicago reported that Joseph Stancak, a lifelong Chicagoan who passed away in 2016, left behind the largest sum of unclaimed money in the history of the United States.

The money in question amounts to $11 million. Over six years, a law firm has managed to track down 119 living relatives, most of whom live overseas. The relatives live in Poland, Slovakia, Czech Republic, Germany, the UK, Canada, Iowa, Minnesota, New Jersey, New York, and some in the Chicago area.

After state and Federal Estate Taxes, each heir will “get a check in the $60,000 range.”

And how did Mr. Stancak wind up with such a hefty estate?

We know he owned a boat named “Easy” and invested in mutual funds. Other than that, neighbors report he lived frugally.

It might not be obvious at first, but this story highlights each of the three main problems of dying without a trust.

If you die without only a will in place, the will is going to be executed through probate. If you are like Mr. Stancak and die without a will – referred to as dying “intestate” – your estate may have to pass through an even lengthier and more onerous settlement process.

Problem #1: Cost

According to an article by LegalMatch, the average cost of the probate process to the gross value of an estate is 3-8%. This means that a $1,000,000 estate may have to pay $80,000 in expenses before heirs receive their inheritance.

The direct costs of probate can be minimal. However, probate may require attorneys, who are billed hourly. If real estate is involved, carrying costs on that real estate will accumulate and be paid from the estate while the probate process is deciding who inherits the property. If the deceased owned real estate in multiple states, then ancillary probate will take place in each state where that person owned property.

In the case of the late Mr. Stancak, he died with $11 million in his estate, which exposed him to state and Federal estate taxes, aka death taxes, in addition to the above costs. Further, none of the articles circulating about the case indicate how much the law firm made for their work on the case. I won’t speculate on what they were paid. However, it would be a safe bet that it was more than $0. Their fees, whatever they were, would be paid by Mr. Stancak’s estate.

We know Mr. Stancak had $11 million in his estate. We also know he has 119 living relatives. We also know that each relative is getting $60,000 or so. But, if you divide $11 million by 119, you get nearly $92,500.

What happened to the other $32,500?

Taxes and probate expenses ate away at the value of Mr. Stancak’s estate to the tune of around $3,860,000. Those expenses could have been avoided through proactive estate planning. While probate expenses might cost an estate 8%, the added tax expense combined with the other expenses cost Mr. Stancak’s estate closer to 35%.

Problem #2: Time

Probate can be a lengthy process and vary greatly from one case to the next. My research resulted in no firm data on this topic. However, LegalZoom posts that one should expect it to take around a year. Our firm’s estate planning team has never seen probate take less than six months. In some of their cases, it has taken more than 2 years.

In Mr. Stancak’s case, he passed away in 2016. His estate is finally being settled now, in 2022. That’s six years of attorney fees plus carrying costs for Mr. Stancak’s home and boat.

We don’t know if Mr. Stancak’s relatives knew about his death, or his wealth. But if any of them did, imagine their frustration at waiting six years for an inheritance.

Problem #3: Publicity

Have you noticed the weirdest thing about this story?

Everyone with an internet connection and a news feed has the opportunity to know about Joseph’s Stancak’s death. We know where he lived and how much money he had. We know how he was invested. We know he owned a boat and what its name was. We also know how many living relatives he has, and where they live.

How is this possible? With all of our modern privacy concerns and scam risks, why is all of this information freely circulating the internet? Was someone robbed? Was there a leak at the law firm?

Nothing illicit happened. Mr. Stancak’s estate is public knowledge now because probate is a public process.

Even if Mr. Stancak had died with a will, that will is executed in a county courthouse, and as such is a matter of public record.

There is a lengthy list of celebrities from Abraham Lincoln to Michael Jackson who either died intestate, or with only a will or holographic will. As a result, we know more about their finances and family than they or their family would probably prefer. For example, we know all of those people died without a will. This is because of the public nature of probate.

Imagine being one of Mr. Stancak’s living relatives right now.

How might you feel, knowing that anyone reading the news may now know that you stand to inherit about $60,000 in the next few weeks? The short article I read to learn about this case only contained their general whereabouts. A little bit more digging would uncover names and addresses.

Personally, I would change my phone number and all of my email addresses immediately.

The good news is that all of this is avoidable.

For estates with values below State and Federal Estate Tax exclusions, a Revocable Living Trust is an inexpensive and simple means of addressing all of the above issues. These trusts avoid probate and its associated expenses, delays, and publicity, all without giving up beneficial ownership of any of your assets.

For more complex estates that may be subject to State and/or Federal Estate Taxes, Irrevocable Trusts may help to address not only the issues with probate, but tax expenses as well. These trusts can be complex, more expensive to set up than Revocable Trusts, and involve giving up beneficial ownership of assets. For most people they are not necessary.

After reading all of this, you may be concerned about having an estate plan that protects your privacy and ensures more of your money passes to loved ones or charities instead of lawyers and governments. We would be happy to help you understand your options and connect you with a licensed attorney.