Is Your Estate Plan Complete?

Even if you are among the minority of US adults who have prepared a will, living trust, or other estate planning document, your plan may not be complete. Estate planning is an ongoing process, requiring regular review and periodic adjustments. A comprehensive plan requires that you consider many issues and details. Your plan should address not only what might happen to you, but also what might happen to the helpers or beneficiaries that you include in your plan. Let’s look at some of the considerations your plan should include.

Do you have backup decision makers?
A well-thought-out estate plan involves numerous individuals that you appoint to carry out your stated preferences. These helpers include:

  • Trustee: The person you name to manage your trust’s money and assets.
  • Personal representative: The person you appoint to administer your estate through the probate process if necessary after you pass away.
  • Guardian: Somebody to whom you give the legal responsibility to care for your minor children or adult children who lack the capacity to care for themselves.
  • Power of attorney agent: A individual to whom you give legal authority to handle financial or healthcare matters on your behalf if you become unable to manage your own affairs.

These helpers that you appoint are given considerable control over you and your affairs. It is important that you choose ones that you trust and are confident will act appropriately. However, circumstances change. There may come a time when your chosen helper is no longer able, willing, or appropriate to act for you. Therefore, it is important that you not only authorize your first choice, but that you also appoint backups for each of these positions in your estate plan.

You may observe that the someone you considered a good choice at one point no longer seems appropriate. Perhaps you observe issues they have with their own affairs that gives you concern about how they would manage yours. Your helper’s age may be an issue to consider. Someone who was a good choice while younger may lose some of their capabilities at a later age, become disabled, or pass away. Someone who was too young to consider earlier may become ideal as they mature.

You should regularly review your choice of trusted decision makers. Evaluate whether those you have named are still appropriate. Confirm that you have named trusted backups in case you become unable to amend your will, trust, or other estate planning documents. Make sure that you do not leave it to a court to name someone to act for you because your list of choices has been exhausted.

Have you named contingent beneficiaries?
A beneficiary is someone you name in your estate plan to receive your money and assets when you pass away. Upon your passing and the administration of your estate, these accounts and property are distributed to or managed on behalf of your chosen beneficiaries. However, there are a few instances where you will need a contingent or backup beneficiary:

  • The primary beneficiary predeceases you.
  • The primary beneficiary cannot be located.
  • The primary beneficiary refuses their inheritance.

Without a named contingent beneficiary, your money and assets might be passed on according to state law in any of these scenarios. In such a case, the probate process would be necessary, causing unnecessary delay and costs, and increased possibility of family infighting. Avoid these negative outcomes by naming one or more contingent beneficiary.

Consider remote possibilities
Occasionally we find that all the named primary and contingent beneficiaries are predeceased. In this remote scenario—in which nobody in the legal chain of inheritance is alive to receive the proceeds of your estate—having contingent beneficiaries may not be enough. If not addressed properly, the government could end up as your unintended beneficiary.

Although this is not a common occurrence, for those with smaller families and few living relatives, it is not impossible. Adding remote contingent beneficiaries, perhaps extended family or charities, can ensure that your assets wind up where you would be comfortable instead of with a beneficiary you would have never chosen.

What about your pets?
Many pet owners consider their beloved animal as part of the family. Your pets are arguably more reliant on you than your children for their daily needs. Have you stopped to ask who will look after your beloved animal friends when you are not able to do so? Do you wish to leave some money or assets to help care for your pet?

In addition to naming a legal guardian for your children, you can name one for your pets. As with any other trusted decision maker, it is helpful if you can provide a list of other people to care for your pet in case your first choice is unavailable, instructions for how your loved ones can find a suitable home, or shelters that you are comfortable having your pet surrendered to in the event no one can care for your pet. Beyond naming a caretaker for the animals that survive you, put your wishes for their care in writing. Make sure that the person who takes ownership of your pets knows exactly what needs to be done for them, including things like medications, allergies, favorite toys, and how to best handle any unusual quirks they may have.

Planning for the Unexpected
Estate planning is easy to avoid or delay. Even once done, it is easy to set the plan aside and not consider it again. No planning or incomplete planning can make matters worse. A good comprehensive plan, however, can provide peace of mind for you and your loved ones. Make sure that you give proper legal authority to a trusted individual or entity in case of your incapacity or death. Name backups so that your plan does not fail. State your desires as to who will benefit from your assets after your death, whether loved ones, pets, or charities, including backups in case your primary choices do not survive you.

We can help you create a comprehensive plan. Schedule an appointment today.