Bay Area Estate And Tax Planning Law Firm

Lack of estate planning can yield unintended consequences

On Behalf of | Oct 14, 2016 | Estate Planning |

Here’s an estate administration outcome that will certainly grab the attention of many individuals in California and across the country.

To wit: An individual — a dad, say — takes out a hefty life insurance policy that names his wife as beneficiary. He derives confidence from knowing that she and the couple’s kids will be well taken care of in the event of his death.

His marriage does not work out, and he eventually remarries. He subsequently passes away, while the policy is still in force.

When the insurance proceeds are ultimately paid out, the entire amount goes to his second wife (his children’s stepmother), despite that outcome never having been anticipated or desired by the decedent. He was simply unaware that the state in which he was domiciled automatically canceled out the beneficiary designation listing his ex-spouse. Such is the law in many states.

Here’s another eye-opening scenario, which plays out routinely across the country in the wake of less-than-stellar estate planning. A would-be planner who remarries assures the kids of his first marriage that they will be provided for in his will. Unfortunately, he never gets around to executing that document. As a result, all his assets go by default to his second spouse following his death, and she is not motivated to share anything.

Such outcomes — unexpected and sometimes yielding results that are the polar opposite of what an individual wanted — are increasingly common in the United States as families become ever-more complex in their nature and composition.

There is an antidote to things gone wrong in estate administration outcomes, and it is this: timely and well-tailored input from a seasoned estate planning attorney that comprehensively considers a person’s stated objectives and takes all reasonable measures to optimally promote them.

A proven estate administration lawyer can provide further information.