In these challenging times of the COVID-19 pandemic, estate planning can be at the forefront of ensuring that clients and their loved ones are protected. Certain high-risk groups, such as medical professionals, first responders and the elderly or other compromised persons, may be more motivated to update existing plans or establish estate plans for the first time that accomplish their goals. Others who have begun their estate plans and perhaps put them on the back burner now want to get their plan over the finishing line.
What will happen to your estate if your primary beneficiary does not survive you? If your will does not name an alternate beneficiary, your estate will be divided according to state law. The way the state divides your estate may not agree with your wishes. Your money may go to someone you don’t like or to someone who is unable to handle it. For example, suppose your will divides your estate between your spouse and three children. If one child dies before you, do you want his or her portion of your estate to go to your grandchildren, your other children, your spouse, or perhaps to a charitable organization or institution?
If you don’t already have a will, being able to name an alternate beneficiary is an important reason to create one.
Another issue to consider is whether the person who would inherit under the law is too young or has special needs. In that case, you may need a trust to protect the assets. If you have young children, you should also consider naming an alternate guardian for your children in the event your first choice is unable to fulfill his or her obligation.
Are the individuals you have appointed to serve in various capacities still willing and able to serve? Often times, people will choose Trustees, or personal representatives, who made sense at the time. Now years later, those individuals may have moved away, your relationship with them may have deteriorated and/or it might be more appropriate simply to choose somebody else as trustee, or personal representative.
When you conduct this review, make sure your current estate planning documents are updated to include any changes in your family, such as new births, or changes in marital status. Often times, tax laws have also changed which create new opportunities in your planning.
Our personal habits and abilities change as we “mature”, as do our estate planning and financial needs. It is important to consider whether changes may be necessary so final wishes are achieved. Don’t put this off, as delaying the process is not an option. Be Educated! Be Proactive!