Make Sure to Address Potential Estate-Planning Pitfalls
May 24, 2013
People in Los Angeles who are working on their estate planning shouldn’t think of it as something that is done once and then forgotten about. We have discussed in the past how estate planning is something designed to be organic: growing out of people’s individual, unique situations and different from those of anyone else.
That also takes into account the fact that life circumstances change and estate plans should change to reflect those. Not only that, it can be extremely useful to make sure that once estate planning has been completed, that it makes sense and reflects your wishes.
One important thing to keep in mind is to account for all kinds of unpleasant scenarios: What if you and your spouse die at the same time, or your children die at the same time? While such events might seem unthinkable, the best estate planning is done with a nod to the worst things that could happen.
One professional tells the story of a woman who had a child out of wedlock with a convicted drug dealer during a crazy time in her life. However, after giving birth, the woman decided to take charge of her life again. Unfortunately, she was involved in a terrible car accident right afterward; her young son survived her by a few hours before he also passed away.
The woman’s family had taken out large insurance policies on both the woman and her son; the woman’s will directed everything be left to her son with no other instructions. He technically was her heir before his death; of course, he had no will, and so the full payout of the insurance policies went to his closest heir — his father, the convicted drug dealer.
A situation like this one could have been avoided by directing that a trust be set up for the son’s benefit rather than having the money simply go directly to him. These are issues that an experienced estate planning attorney can help people think of and deal with.
Source: Fox Business, “Duck Estate-Planning Fiascos Before it’s Too Late,” Sheyna Steiner, May 13, 2013