what if your estate plan beneficiary dies before you?

What if Your Estate Plan Heir Dies Before You?

The loss of a loved one has left your family stunned, grieving, and unsure of what to do next. While the coming days, weeks, and even months will be filled with painful decisions, don’t forget to set aside time to review your estate plan after everything has settled down. There are several circumstances under which you should revise your estate plan, and the death of an heir or beneficiary is one of them.

You have a lot to handle during this painful time. Don’t let concerns about your estate make life even harder for you. The team at Haygood, Cleveland, Pierce, Thompson & Short is here to handle your legal needs with tact and sensitivity. Call us at 334-821-3892 to get started.

Avoiding Disputes and Unclear Instructions

If you pass away and one of your named heirs or beneficiaries preceded you in death, your estate plan could be full of confusing instructions and designations. Consider, for example, one of your heirs passing away before you.

They were set to receive 25% of your estate. What happens when you pass away? No one can ask you what you wanted to happen to that 25%. Did you want that 25% spread out among the other beneficiaries, or did you want that 25% to go to your beneficiary’s heirs? If there are people who feel strongly on both sides, your family could be facing a legal battle as they grapple with your death.

Naming Contingent Beneficiaries

One way around this is to name contingent heirs or beneficiaries. This type of clause in your estate plan documents explains who should inherit your assets if a named beneficiary passes away. This clears up any lingering questions and lessens the chance of a disputed estate.

However, it’s unnecessary to use this as your main planning tool. Instead, you should set aside time to review your estate plan every year, remove those who have passed away, and clarify your instructions. The clearer your estate plan is, the less likely your family members are to question it.

Determining How to Spread Out Their Assets

There are several things you can do when deciding what to do with the assets you would have passed on to a loved one. If they have children, you may want to will those assets to their children. This may allow them to enjoy a higher quality of life, particularly if they lost a parent young. You may also choose to have the decedent’s share of the estate spread among other beneficiaries.

If you have your estate set up so that each of your four children receives 25% of your assets when you pass, you may specify that if one child passes away before you, your assets will be split 33%/33%/33%. If you want to honor your lost loved one, you may have their share of assets given to a charity that meant a lot to them.

Finding New Trusted Decision Makers

Don’t forget that there is more to an estate plan than your assets. What will happen to you if you become incapacitated? If the person you chose to handle your financial or healthcare matters passes away before you, your wishes could be ignored if you become incapacitated.

Since the courts can no longer give power of attorney to the named party, it is up to your family members to fight for it. When this happens, there is no guarantee that the person who is chosen truly has your best interests in mind. To combat this, change your named parties as soon as possible after a death in the family. Whether you are incapacitated for a day or for years, you deserve to know that your finances are taken care of and that your healthcare preferences are respected.

How We Can Help with Your Estate Plan Needs

At Haygood, Cleveland, Pierce, Thompson & Short, we are dedicated to helping our clients create and maintain estate plans that reflect their long-term goals and what they want for their legacy. Let us develop an estate plan that honors all of your hard work throughout your life. To sit down and talk more about what you want to accomplish with your estate plan, call us at 334-821-3892 or fill out our online contact form.

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