Estate planning is much more than just death planning and giving away your stuff after you die. It’s also about planning for circumstances that you may not have anticipated.
This post is the second installment in our "Everyone Needs and Estate Plan" series. If you missed Example 1, click here to read it.
Example 2: You are married, and you have a couple of children. Now imagine that you and your spouse divorce. Neither of you have done any estate planning. If you or your now ex-spouse remarry and die before his or her new spouse, you could have unintentionally just cut your kids out of his or her inheritance. Without proper planning, by default, your estate goes to your surviving spouse, the person you were married to when you died. In this example, the surviving spouse happened to be someone who is not the parent of your children. At least some of the assets you may have intended on going to your children are now in the hands of someone unrelated to your children.
Example 3: Same facts as Example 2, except neither of you remarry, and instead you both tragically die. Your children are still minors (under the age of 18) and lack the legal authority to make legally-binding decisions on their own (enrolling them in school, going on field trips, renting an apartment, making financial transactions, etc.). Because you did zero estate planning, we now have two orphans who need legal guardians. Well, you never got around to telling the world who that should be in a legal document. So whoever thinks they should be your children’s parents goes off to court, and hopefully the court makes a good decision. That's probably not the way you want it to play out.
Check back next week for another example of why everyone needs an estate plan. If you would like a free one-hour consultation to discuss your estate planning goals, do not hesitate to contact us.