Revising Your Estate Plan After the Death of An Heir
Dealing with the death of a loved one is undoubtedly one of the tough experiences of life. Everyone needs space and time for processing and grieving the loss of a deceased regardless of whether they were a close friend, partner, or a blood relative. You should consider updating your estate plan once you have had time to cope with what happened.
Update Your Heirs
You should revise the estate document if the deceased loved one was heir to money or property under a revocable living trust or the Last Will and Testament. You probably put a lot of thought into how your wealth and possessions should be distributed after your death. This is the primary reason why people take so much time in creating a revocable living trust. They want to have control over this distribution.
If your heir passes away and you only had a single beneficiary, the money and accounts will become part of the general estate. It will be distributed as per the terms of the will. Your property and accounts may not be distributed the way you intended if you fail to clearly identify and update primary and secondary beneficiaries.
Review Trusted Decision Makers in the Estate Plan
You probably chose trustee for any trusts as part of the estate plan. You would have chosen agents to act as healthcare and financial powers of attorney as well. These are the people that would act on your behalf in case you die or become incapacitated. You would need to update the documents if the deceased loved one was named in any of the roles. It is best to choose secondary decision-makers to prevent this problem.
The Executor of Your Last Will and Testament
Your executor is the person responsible for paying outstanding debts, collecting all property and accounts, and distributing them to the heirs as per the will. This can be a time-consuming role. You should be prepared to choose a backup in case the executor passes away before you. The probate court will determine the executor if you have not named a backup.
Successor Trustee and Co-trustee of a Revocable Living Trust
A trust is managed by a co-trustee as per the creator’s wishes. The successor trustee will manage after you. The trustee is charged with investing, managing, and distributing accounts and property in a revocable living trust. You should review the trust documents if the trustee dies before you. You should insert instructions to handle a situation in which the person serving as a co-trustee passes away.
You won’t have any problems if you are the sole trustee, and the successor trustee passes away. Furthermore, there may be problems if no one is listed as a trustee. Your beneficiaries would need to go through the trust agreement for guidance on filling the vacancy. The trust agreement may state that a minimum number of beneficiaries can come together for appointing a new trustee without getting the court involved.
Financial Power of Attorney Agent
An agent is someone that acts on your behalf to make financial decisions. The powers of an agent will be limited according to your instructions. For instance, they may be able to open a bank account or sign a check on your behalf. You won’t have anyone with the authority to act in your stead regarding financial matters if the agent dies before you and there is no one else named.
There may be an unforeseen situation in which you become incapacitated. Without an agent, your loved ones would need to go to court and have a legal selection made for taking care of financial matters. This is a stressful, time-consuming, and public process. By revising the estate documents, you can name a new agent for financial matters and save everyone a lot of trouble.
Medical Power of Attorney Agent
An agent under a medical power of attorney is allowed to make healthcare decisions on your behalf only when you are unable to take them. You may feel that there is no immediate need for revising this document in case your agent passes away from you. However, the future is unknown, and you don’t know when you would need your agent.
Your loved ones will need to go to probate court for having a guardian appointed if you don’t have one. The probate judge will choose the agent as per the state law. There is a high likelihood that this may not be the same person you would have chosen.
Guardian for a Minor Child
The probate court will appoint the next in line to care for the children if the other parent is unfit to care for the children and the guardian you chose died before you. The person chosen by the court may not have the same parenting opinion as you.
Consult an Experienced Estate Planning Attorney Today
If you are grieving the recent loss of a loved one, we understand that this is a tough time for you. But it is also an important time to review your estate plan in the wake of the new circumstances. The skilled and compassionate estate planning attorneys at John H. Ruby & Associates are here to help you take the next steps when you are ready. To request your free and confidential consultation, call (502) 895-2626 or reach us online.