When you create an estate plan, it is important to pick your beneficiaries carefully. However, it is also important to understand that if one of your beneficiaries dies shortly after you, the assets you leave to that person will pass to his or her beneficiaries. For example, if you leave your estate to your second wife and nothing to your kids, but she dies a few weeks after you die and her will names her children from a prior marriage as her sole beneficiaries, your children will inherit nothing from you. Obviously, this is not what you would have wanted to happen.
How can you prevent this from happening? You may want to include a survivorship clause in your will. This provision requires a 90-day waiting period before any assets can be distributed to your heirs. You should also think about the relationship with the named beneficiary. For instance, in the situation where your beneficiary is a second spouse and you both have children from previous marriages, you should consider including a contingency that if your spouse (the primary beneficiary) does not survive you for a set period of time, then the remainder of your estate should transfer to your children (or other named secondary beneficiaries).
You should also consider leaving your assets in Trust. By using a Trust you can provide support and use of assets to your spouse, but when your spouse dies, the assets go to your children. In second or blended family situations, a Trust is often the preferred tool.
When you are creating your estate plan, it is essential that you ask the “what if” questions. We can help you with trying to anticipate the different scenarios you should plan for in your estate plan. If you have an existing estate plan, we can help you review your beneficiary designations and ensure that your assets will be distributed exactly how you want.
The Astill Law Office has provided high quality legal services for over 30 years. We specialize in wills, trusts, estate planning, and asset protection. If you have any questions about creating a Trust, Will, or estate planning in general, contact The Astill Law Office at 801-438-8698.