Trust and estate planning is an area where it is imperative to consider all the angles. If you do not take into account every contingency there could be problems. Often people make assumptions that don’t work out. A gentleman just left my office here at LegaLees with a trust and estate planning problem that occurred because of a faulty assumption.
In his case, he was trustee for a young woman who was married to a much older man. She was doing her trust and estate planning and asked him to act as trustee. She needed someone to manage things for her teenage children and her husband is too old to handle it. This gentleman was certain he would never have to act as trustee for her because her husband would die first. Unfortunately, she got cancer and died quickly. He is now trying to unwind the mess.
Trust and estate planning should account for many different contingencies. What happens if the wife dies first? What happens if both parents die together? What if a child dies? What if only one parent and a child dies? The sad truth is that many unexpected events can change the course of a life and bad estate planning could greatly compound the tragedy.
It is OK to do your own trust and estate planning, but simple do-it-yourself kits can lack planning perspective and foresight that an attorney has. When you are in practice for a while, you see a lot of unexpected consequences. For instance, recently there was a case where a young lady had a baby with her drug dealer. She decided to take charge of her baby and her life. Things were going well when she was suddenly killed in a car accident. She died instantly and her daughter died two days later.
She was responsible enough to have a will which left everything to her daughter. If her daughter had lived, everything would have gone directly to the small child. Still, no money was left in trust and no one was identified to manage and protect the assets. Because the child died, this may seem beside the point. However, because she had neglected her trust and estate planning, the nightmare continued.
Her family pursued a $1 million wrongful-death claim on her life with another on her daughter. When the suit paid off, the only intestate heir of the daughter was her drug-dealing father. Intestate refers to the circumstance of dying without a will. The daughter had lived for a short time after her mother. By the terms of the will, all of her assets passed directly to the daughter, including her wrongful death claim. The daughter’s wrongful death claim added to her estate and then all of the assets passed to the drug dealer father.
This was a tragedy that trust and estate planning could have prevented. If there had been a trust in place to control the daughter’s assets, it could have stipulated that any remaining assets would pass to the mother’s family.
The important thing to remember is that it is impossible to divine what will happen in the future. When doing trust and estate planning it is important to have professional guidance. My book Protecting Your Financial Future walks you through many eventualities so you should be able to map out a good plan.