Avoid Surprises in Your Estate Plan

 

The effectiveness of an estate plan can be summed up in one word: expectations. Does your estate plan reflect the expectations of your beneficiaries? They may or may not like the results, eg who gets what, but was it expected? 

 

Surprises, certainly dramatic surprises, don't usually work out too well and can lead to fights and lawsuits - not a good legacy to leave behind.

 

Here are examples of estate plans that would meet your beneficiaries' expectations.

 

You have two children. You have a great relationship with both of them. Your living trust leaves your assets to each child equally. No surprise.

 

You have a near-do-well child - alcoholic, drug abuser, can't hold a job, etc., and you leave him a share of your estate, but your living trust leaves it to him in a trust to be managed by a trustee so he doesn't blow it. No surprise, he needs the help.

 

You have two children. As you get older and your health deteriorates, one of them pays your bills and takes care of you. The other never visits you and tells you he wants nothing to do with you. Your living trust leaves most of your estate to the child who takes care of you and a much smaller share to your estranged child. No surprise. This should be expected.

 

You have three children and your living trust names your youngest child as your successor trustee and executor. Your youngest child is an accountant and has already administered her mother-in-law's trust. No surprise, she is the most qualified.

 

Here are examples of estate plans that don't meet expectations and will result in problems.

 

You have two children and you have a great relationship with both of them. One of them says he will mow your lawn, but instead, he hires a gardener to do it. Feeling slighted, you amend your living trust to leave your estate to your other child. I know this sounds like a joke, but believe it or not, this is a true story. Many years ago, I met with a lady who wanted to disinherit one of her sons because he hired a gardener to take care of her yard instead of doing it himself. We politely declined the representation. We did not want to be part of that mess.

 

You have three children, and your wife of 40 years and the mother of your children dies. A year after she dies, you amend your living trust to leave everything to your new girlfriend. Surprise. At the very least, your children won't be happy. But it could escalate. They may sue your girlfriend for undue influence and tie up your estate in probate court for years to come.

 

You have three children. Two of your children are financially well-off. One of your children is not. You amend your living trust to leave everything to your struggling son. This is fine and certainly within your right to do. However, if your two successful children had no warning, it will be a shock and could lead to resentment and anger.

 

You have two children. Without a discussion with your children, you amend your living trust to leave everything to charity. Again, this is fine and within your right to do, but your children will be shocked and probably sad and disappointed because they had no warning.

 

It's all about expectations.

 

We recommend you not drop an unexpected bomb on your estate plan. In the words of Taylor Swift, you don't want your family to say, "She's laughing up at us from hell."