Many people pride themselves on their word. A handshake, a verbal promise, or a long-standing understanding can feel just as binding as a written contract. Unfortunately, when it comes to Estate Planning, and especially after someone passes away, handshake agreements and verbal promises are often a recipe for confusion, conflict, and disappointment.
The core problem is simple: verbal agreements usually do not survive death.
When a person dies, their estate is governed by written law, not personal recollections and promises. The Personal Representative has a legal duty to follow the decedent’s Will, Trust, and applicable state law, not the promises made during the decedent’s life. Even if everyone agrees that a promise existed, the Personal Representative may not honor it.
Consider this scenario: a homeowner verbally agrees to sell their property to a neighbor at a substantial discount as a “thank you” for years of help. No contract is signed between the homeowner and the neighbor. No provision is added to the homeowner’s Will or Trust. When the homeowner passes away, the neighbor expects the deal to move forward.
Legally, however, the homeowner’s estate is obligated to sell the property at its fair market value. The Personal Representative of the estate cannot simply honor a discounted sale without authority in the estate documents, and doing so will expose the Personal Representative to liability from other heirs of the estate and courts.
What felt like a binding agreement during life becomes, after death, unenforceable. Handshake agreements fail because: 1) memories fade or differ over time, 2) key witnesses may be unavailable, 3) courts require clear, written evidence, and 4) Personal Representatives must protect all beneficiaries, and not some unenforceable promise.
Without proper written documentation, verbal agreements are viewed by probate courts as intentions, not obligations. Proper Estate Planning turns intentions into enforceable instructions. This may include: 1) a written contract completed during life, or 2) a specific gift or sale provision in a Will or Trust. You should work with an experienced Estate Planning attorney to make it legal.
When plans are documented, there is clarity. When plans are not documented, the Personal Representative’s hands are tied and they often can’t do anything about it. If something matters to you, put it in proper writing. A handshake may feel sufficient today, but without proper Estate Planning, it may mean nothing tomorrow.
An experienced Estate Planning attorney can help ensure your wishes are honored clearly, legally, and without confusion for your loved ones who you leave behind. If you are a Maryland or Virginia resident and would like help with protecting your assets and loved ones in the event of death or disability, contact us at 301-696-0567 or self-schedule on our website. Sign up for our newsletter: bit.ly/LOLACnewsletter