When making an estate plan, keep in mind that the plan may be implemented and administered well into the future. Of course no one can predict the future and a good estate plan needs to be well thought out while keeping in mind that the plan might not take effect for decades. Two specific areas to watch out for are naming people to administer an estate and assumptions about what order events will take place.
When selecting people to administer a trust, the first instinct for many people is to think of people their own friends and associates. The problem with this concept in the estate planning context is that a person’s current trusted friends are often in their same age range. The friends might not keep their competence or outlive the person whose estate they are trusted to administer. As a result, the estate may be left without competent administrators to put in place an otherwise carefully constructed plan.
The problem also applies if a person plans on setting up a trust to provide for children or grandchildren rather than giving them a direct inheritance upon death. When naming potential trustees for the trust a person should keep in mind people who will be able to function in that role well into the future.
The solution to this problem is to create a list of people who could serve as decision makers in an estate plan. The more people listed as fiduciaries and potential successors should significantly reduce that chances of an estate plan being left in limbo due to a lack of a named decision maker.
The other related problem is an estate plan that is predicated on assumptions of who will outlive someone else. A simple document that merely leaves everything in a spouse’s hands may not adequately preserve assets if the spouse dies and the living spouse is no longer in a position, whether due to a lack of competence or mere lack of awareness, to do further planning. It is better to develop a more robust plan now, while each person is still capable, to adequately protect assets and provide for future beneficiaries.
Please make an appointment with an elder law attorney to make sure your estate plan has sufficient flexibility to be effective well into the future.
