As a parent with minor children, you have no time to plan for the unexpected; you’re always rushing from home to school to work to errands to extracurriculars, etc. You do all of this to provide the best future for your family and children. Through the firehose of life, they are your North Star.
And yet, roughly two-thirds of Americans do not have an estate plan, according to a recent survey from Caring.com.[1]
If you are among the minority of US adults who have prepared a will, living trust, and other end-of-life documents, you may think your estate plan is settled. But you might want to think again. An estate plan is a living set of documents that should be regularly reviewed and updated. Even if you are vigilant about changing your estate plan over time, there may be aspects that you have missed, such as beneficiary designations for retirement accounts or life insurance policies.
Because your estate plan relies on others, such as designated decision-makers and beneficiaries, it is essential 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 attention to minor details can help keep your final wishes intact.
Choosing these crucial decision-makers is not a matter to be taken lightly. They will exercise considerable control over you and your affairs and must be trusted to act in your stead. However, there may come a time when they are no longer able (or willing) to do what you ask them to do. This is why you must list your first choice and at least two backups for each of these positions in your estate planning documents.
People’s lives—and your perception of their lives—can change dramatically in a short period, and specific changes might impact their ability to serve you. For example, you might find out that a trustee has had problems handling their finances, which calls into question their ability to handle trust funds on behalf of your beneficiaries. Or a guardian could have issues with their children, which causes you to question their fit as your children’s caretaker.
It does not have to be suspicious behavior to make you question your decision. It could be something as benign as age. Somebody who makes an ideal guardian in their 30s, 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 named dies or becomes disabled? You may also need to name a replacement if a designated decision maker seeks to withdraw.
The key takeaway is that you should regularly reevaluate your choice of trusted decision-makers and name backups. Estate planning is not a set-it-and-forget-it process. It is too late if you are no longer around to amend your will, trust, or other estate planning documents. Alternatives will ensure that there is no catastrophic failure in the chain of command. In this event, you would leave crucial end-of-life matters in the hands of the courts.
Many pet owners will acknowledge that their furry (and feathered and scaled) friends are very much a part of the family. Your pets are arguably more reliant on you than your children for their daily needs. Have you stopped to ask who will look after your beloved animal friends when you cannot do so? They should be a part of your planning for the unexpected.
If you are an empty nester, your pet might receive the devotion once reserved for your children. But they may not have been top of mind when you met with an estate planning attorney.
In addition to naming a legal guardian for your children, you can designate one for your pets. As with any other trusted decision maker, you can provide a list of other people to care for your pet. This would be helpful in case your first choice is unavailable. These instructions could include how your loved ones can find a suitable home or shelter. You could name a shelter you are comfortable having your pet surrendered if no one can care for your pet. Beyond naming a caretaker for the animals that survive you, it is best to write your wishes for their care. That way, the person who takes ownership of your pets knows what they need to do for them. This could include medications, allergies, favorite toys, and how to handle best any unusual quirks they may have.
A beneficiary is someone you name in your estate plan to inherit your money and property. This property could include such assets as bank accounts, investments, and insurance policies. Upon your passing and the administration of your estate, these accounts and property will distribute to your chosen beneficiaries. If they are too young (i.e., under 18), the court will appoint a temporary manager of the assets.
However, there are a few instances where you will need a contingent or backup beneficiary:
Without a contingent beneficiary, your money and property might transfer according to state law in any of these scenarios. This could require going through the probate process. Probate can delay distribution, increase estate settling costs, and lead to family infighting. You should avoid these potential outcomes by naming a contingent beneficiary. You could also name another two, or three, or more, if you have any doubts. As life goes on, your relationships may change. You will want to alter your beneficiaries accordingly and not be content with a set-it-and-forget-it estate plan.
Although you may prefer not to think about it, you should prepare for the unthinkable. That is, all of the loved ones you name as beneficiaries in your estate plan could predecease you.
In this improbable but catastrophic scenario—in which nobody in the legal chain of inheritance is alive to receive the proceeds of your estate—having contingent beneficiaries may not be enough. Depending on where you live, the government could end up with your money and property. This is especially the case if you have no surviving family.
Although this is not a common occurrence, it is not impossible for those with smaller families and few living relatives. Adding a remote contingent beneficiary clause or family disaster plan to your estate plan allows you to name a charity or other organization that will receive your money and property should the unthinkable happen.
For many Americans, illness, accidents, or other unexpected life events serve as a wake-up call. They realize that they should have a basic will, at the very least. Although essential, many people still put off estate planning. They cite procrastination and a perceived lack of enough money and property. They also bring up a lack of knowledge about the process and concerns about costs.
Estate planning does not have to be complicated or expensive. It is especially inexpensive when you consider the potential costs of not having an estate plan. Can you afford to leave things to chance—or the government? Your objectives need backups to account for the unexpected for those who already have documentation. It is worth your peace of mind to revisit an estate plan. You can add backup decision makers, pet caretakers, contingent beneficiaries, disaster clauses, and anything else you may have overlooked.
As an Austin Life and Legacy Lawyer, I can ensure that you cover all of your bases. Schedule an appointment today, and let's get started planning for the unexpected!
[1] Daniel Cobb, Caring.com’s 2022 Wills Survey Finds That 1 out of 3 Americans Without Estate Plans Think They Have Too Few Assets to Leave Behind, Caring.com, https://www.caring.com/caregivers/estate-planning/wills-survey/ (last visited June 28, 2022).
(By Appointment Only)
14425 Falcon Head Blvd
Bldg E-100
Austin, TX 78738
