Estate PlanninG

4 Important Things Your Estate Plan May Be Missing

If you’re among one-third of US adults with a will, living trust, or other end-of-life documents, you may think your estate plan is settled. But you might want to think again. An estate plan should be regularly reviewed and updated. Even if you’re vigilant about changing your estate plan over time, it’s easy to accidentally overlook certain aspects, like beneficiary designations for retirement accounts or life insurance policies.

Because your estate plan relies on others, such as designated decision-makers and beneficiaries, it’s important to consider what might happen to you and what might happen to them. There may also be other aspects of your estate plan that you have overlooked. The best-laid plans often go awry, but paying attention to the smallest details can help keep your final wishes intact.

Who are your backup decision-makers?

A well-thought-out estate plan involves numerous individuals that you designate to carry out your stated preferences, including:

  • Personal representative: The person you appoint to administer your estate through the probate process after you pass away
  • Trustee: The person you name to manage your trust's money and property
  • Guardian: Somebody you've given the legal responsibility to care for your children, including adult children who lack the capacity for self-care
  • Power of attorney agent: A chosen individual who has the legal authority to handle medical or financial affairs on your behalf if you become unable to manage your own affairs

Choosing these individuals isn't something to take lightly, as they'll have considerable control over you and your affairs. You also have to trust them to act in your best interest. However, there may come a time when they're no longer able or willing to do what you've asked of them. That's why it's crucial to list your first choice and at least two backups for each position.

People's lives and how you perceive them can change dramatically in a short period, and certain changes might impact their ability to serve you. What if you realize that your trustee has major issues handling their finances? What if your chosen guardian has a lot of problems and drama with their own children?

It doesn't have to be questionable behavior that makes you roll back your decision. It could also be something like age. Somebody who makes an ideal guardian in their 30s, 40s, and 50s might be less than ideal in their 60s and 70s. Similarly, a legal guardian might be too young at the moment—but the perfect candidate in five to ten years.

And what would happen if the guardian you've chosen dies or becomes disabled? A replacement may also be required if a designated decision maker approaches you and declares that they would rather not be in that position.

The key takeaway is that you should regularly reevaluate your choice of trusted decision-makers and name backups, because life happens. Taking these measures will ensure there's no catastrophic failure in the chain of command that leaves crucial end-of-life decisions in the hands of the courts.

Did you include your pets?

If you’re a pet owner, you probably consider your furry (or feathered or scaled) friends as part of your family. Your pets arguably need more attention and care than your children for their daily needs. Have you considered who will care for them if you can no longer do so?

Even though your pets are undoubtedly important to you, they may not have been top of mind when you met with your estate planning attorney. But did you know in addition to naming a legal guardian for your children, you can also name one for your pets? As with any other decision-maker, it’s helpful to provide a list of alternative people who can care for your pet in case your first choice is unavailable. You can also leave instructions for how your loved ones can find a suitable home or shelter to which you’re comfortable having your pet surrendered in case no one can care for your pet.

It’s best to put your wishes for your pet in writing. That way, the person who takes ownership of your pets knows what they need, including medications, allergies, favorite toys, and how to handle any unusual quirks they may have.

Who are your contingent beneficiaries?

A beneficiary is someone you name in your estate plan to inherit your money and property like bank accounts, investments, and insurance policies. When you pass away, these accounts and property are distributed to 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 contingent beneficiary, your money and property might be passed on according to state law in any of these scenarios. This could require going through the probate process, which can delay distribution, increase estate settling costs, and lead to family infighting. All of these potential outcomes are best avoided, and you can easily do that by naming a contingent beneficiary—or two, or three, or more, if you have any doubts.

Have you considered the unthinkable?

Let's consider a terrible, highly unlikely scenario: all of your loved ones you named as beneficiaries predecease you.

If this were to happen, having contingent beneficiaries may not be enough. Depending on your state, if you have no surviving family, the government could end up with your money and property.

This isn't an impossible scenario for those with smaller families and few living relatives. You could add a remote contingent beneficiary clause or family disaster plan to your estate plan that would allow you to name a charity or other organization that will receive your money and property should the unthinkable happen.

Planning for the Unexpected

For many Americans, illness, accidents, or other unexpected life events serve as a wake-up call that they should have a basic will, at the very least. Although essential, many people still put off estate planning, citing procrastination, a perceived lack of enough money and property, lack of knowledge about the process, and concerns about costs.

Estate planning does not have to be complicated or expensive, and when you consider the potential costs of not having an estate plan, can you afford to leave things to chance—or the government? For those who already have documentation, your plans need backup plans to account for the unexpected. It is worth your peace of mind to revisit an estate plan and add backup decision makers, pet caretakers, contingent beneficiaries, disaster clauses, and anything else you may have overlooked.

Our estate planning attorneys can ensure that all of your bases are covered. To schedule an appointment, don't hesitate to get in touch with our office. Call Santaella Legal Group, serving all of California, at (925) 831-4840.

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