It’s never too early for people to plan their estate. Even at young adulthood, this is something that everyone should already be thinking about and doing. After all, life is very unpredictable, so it’s better to have everything prepared and ready as early as now.
But one mistake that people encounter when planning their will or writing their estate early on is failing to update it. A lot of things can happen during a person’s life and things can change drastically in just a short period of time. The things that were stipulated in the will or estate plan may no longer be as applicable or desirable as it was when the document was drafted.
It could be because relationships fall out or people lose contact. But the most common change is when the people, whether named beneficiaries or executors, in the estate document have passed away before the person who created the will or trust.
When this happens, there rises a lot of doubt as to what happens to the assets and who should receive it. There are proactive things that a person can do to be prepared for these situations. One of the most important is that there should be backups.
Creating Backup Beneficiaries
Estate planning attorneys would always recommend that a person name some backups in the will. There should be a “waterfall” stipulation as to who should get the assets. If they cannot, who receives it instead? And should the backup not be able to receive it as well, more names should be listed just in case.
Without these backups, the asset that cannot be given to the named beneficiary will be distributed according to law. It’s going to certainly go to a family member of the deceased, but the beneficiaries or executor won’t have a say in it.
Creating Backup Executors or Personal Representatives
In an estate plan, a person appoints someone to be in charge of the assets of the estate when the former passes away. This can be in the form of a personal representative, executor, trustee or guardians of the minor children.
In case these named representatives pass away before the person appointing them or otherwise are unwilling to serve, there should be backups listed in the estate document. Further, these backups need to be specific, especially in case of co-trustees or co-executors. There needs to be a clear stipulation on their respective authorities and powers when it comes to the actions taken for the estate.
Wills, revocable trusts, and other estate planning documents should always be reviewed and updated occasionally. Everyone should make it a point to name a backup in case the primary beneficiary or personal representative is not viable or unable to receive the money or take on the duty of administering the estate.