In the late 1970s Andreas Jochem, originally from what is now the Republic of Slovenia, migrated to the United States, where he is now a citizen. A man of many talents and deep foresight, he has built a large fleet of ocean-going oil tankers during his stay in the United States. Now a wealthy man in his 60s, he resides in Palm Springs, Florida, with his second wife, Anna Maria, age 35. He has two sons, one in junior high and one a high-school freshman. For some time, Andreas has considered preparing a will to ensure that his estate will be properly distributed when he dies. A survey of his estate reveals the following: 

The house and the Gold Mines International shares are held in joint tenancy with his wife, but all other property is in his name alone. He desires that there be a separate fund of $1 million for his sons’ education and the balance of his estate be divided 40% to his sons, 40% to his wife, and 20% given to other relatives, friends, and charitable institutions. He has scheduled an appointment for drafting his will with his attorney and close friend, Horace Hinkler. Andreas would like to appoint Horace, who is 70 years old, and Andreas’ 40-year-old cousin, Franc Hren (a CPA), as co-executors. If one of them predeceases Andreas, he’d like Second National Bank to serve as co-executor. 

Critical Thinking Questions 

1. Does Andreas really need a will? Explain why or why not. What would happen to his estate if he were to die without a will? 

2. Explain to Andreas the common features that need to be incorporated into a will. 

3. Might the manner in which title is held thwart his estate planning desires? What should be done to avoid problems? 

4. Is a living trust an appropriate part of his estate plan? How would a living trust change the nature of Andreas’ will? 

5. How does the age of his children complicate the estate plan? What special provisions should he consider? 6. What options are available to Andreas if he decides later to change or revoke the will? Is it more difficult to change a living trust? 

7. What duties will Horace Hinkler and Franc Hren have to perform as co-executors of Andreas’ estate? If a trust is created, what should Andreas consider in his selection of a trustee or cotrustees? Might Horace and Franc serving together be a good choice?

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Ranch in Colorado Condominium in Santa Barbara House in Palm Springs $1,000,000 800,000 1,500,000 Franchise in ice cream stores 2,000,000 Stock in Google 5,000,000 Stock in Wal-Mart 1,000,000 Stock in Gold Mines International 3,000,000 Other assets 200,000 Total assets $15,500,000