Protect Your Plans in Three Worst-Case Scenarios

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Even if you have an estate plan, there are dangers out there that can cause confusion or even threaten your plan. Here are three examples of worst-case scenarios and how a carefully drafted plan deals with those issues:

Scenario One: Family Members Battle One Another

Despite your best intentions, what happens if the people you care about most get into a knockdown, drag-out fight over your estate? Disputes over who should get what assets, how to interpret an unclear instruction from you, or how loved ones should manage your business can open old wounds.

Lawsuits between family members can drain your estate and tarnish your legacy. Family infighting can lead to less obviously dramatic problems as well. For instance, let’s say you name your daughter as the executor, and she holds a deep grudge against your youngest son. Your daughter can’t do something as drastic as rewriting your will to leave him out. But she could drag her feet with the probate court, interpret the will “poorly” (unfairly privileging herself and your other son over your youngest), or engage in other shenanigans. In all of these cases, your youngest son would have to hire a lawyer and potentially get involved in a protracted legal battle. This is a bad outcome for everyone.

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

Scenario Two: Both Spouses Die Simultaneously

Many estate plans transfer assets to a surviving spouse, but what happens if both spouses die at or near the same time? This situation may be even more complicated if both spouses have separately owned assets or if it’s a huge estate. In that case, asset distribution may depend on who predeceased whom, the amount of estate tax paid, and other factors. There are ways to handle this issue:

  • 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 “Doomsday” clause that names a final beneficiary in the event all primary beneficiaries die at once.

Scenario Three: Passing Away Overseas

Expatriates may need particular care in estate planning. If a death occurs outside the U.S., foreign laws may conflict with provisions of an American-made 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, consider a second will consistent with those nations’ laws, too. However, the starting point is completing your estate planning (will, trust, and other documents) here 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, contact attorney Myrna Serrano Setty today.

This article is a service of attorney Myrna Serrano Setty. Myrna doesn’t just draft documents. She helps her clients make informed and empowered decisions about life and death, for themselves and their loved ones.