Protecting Your Estate Plan Against Worst-Case Scenarios 

There is no such uncertainty as a sure thing. – Robert Burns 

Even with an estate plan, things can always happen that may cause confusion for the estate–or threaten the plan altogether. Below are three examples of worst-case scenarios and ways to demonstrate how a carefully crafted plan can address issues, from the predictable to the total surprise so you can feel comfortable in protecting your estate plan against worst-case scenarios. 

First Scenario: Family Members Battle One Another 

Despite your best intentions, what happens if the people you care about most get into a heated and protracted legal dispute over your estate? Arguments over who should get what assets, how to interpret an unclear instruction from you, or how loved ones should manage your business can open create rifts between seemingly tightknit families.

Further, a legal dispute between family members can drain your estate and tarnish your legacy. Family infighting can lead to less obviously dramatic problems as such as naming your daughter as the executor, but she holds a deep grudge against your youngest son. Your daughter cannot do something as extreme as rewriting your will to leave him out. However, she could delay the probate process, interpret the will “poorly” (unfairly privileging herself and your other son over your youngest), or engage in other inappropriate behavior. In all of these cases, your youngest son would have to hire counsel and potentially get involved in a protracted legal battle, which can result in a bad outcome for everyone.

To prevent such situations, consider using an impartial (e.g. third party) trustee or executor. Moreover, speak with a qualified estate planning attorney to prepare for potential future conflicts among family members.  

Second Scenario: Both Spouses Die Simultaneously 

Many estate plans transfer assets to a surviving spouse, but what happens if both spouses die at the same time? This situation may be even more complicated if both spouses have separately owned assets or if the size of the estate is substantial. In that case, distribution of the assets may depend on who predeceased whom, the amount of estate tax paid, and other factors. There are, however, ways to approach this potential situation in an estate plan making it easier for your family to understand your intent, including, as recently discussed in Motley Fool: 

·           A simultaneous death clause that automatically names one spouse as the first to die;

·           A survivorship deferral provision, delaying transfer of assets to a surviving spouse, thus preventing double probate and estate taxes; and

·           A so-called “Titanic” clause that names a final beneficiary in the event all primary beneficiaries die at once. 

Third Scenario: Passing Away Overseas 

Expatriates may need particular care in setting up an estate plan. If a death occurs outside the U.S., foreign laws may conflict with provisions of domestic estate plan. Thus a plan may need to be reviewed both for the US and other nations' laws. If you intend to live abroad for an extended period, as discussed in this New York Times article, it may be a good idea to draw up a second will consistent with those nations' laws, too. However, the starting point is completing your estate planning in the United States first. 

If you have concerns as to whether your current estate plan is safeguarded against these three worst-case scenarios, or anything else you might be worried about, we are here to assist and counsel you through the process. Please visit our website to set up a free 30-minute consultation today so you can learn about protecting your estate plan against worst-case scenarios.