A backup plan is a fundamental part of an estate. When writing a will, it is a common misconception that assets will be shared among all of the listed beneficiaries. However, pandemics, accidents, and crimes can take multiple lives all at once, leaving the need for a contingency plan.

Reasons to Include a Back Plan in an Estate

Incidents of loved ones passing away in close proximity have risen, especially during the COVID-19 pandemic. Without a contingency plan, such situations could impact estate plans, potentially lowering the value of assets left behind or dishing them out to individuals that weren’t intended beneficiaries.

While it is hard to predict the future, every person should seek assistance from an estate planning attorney when understanding the aspects of his or her estate plan and developing strategies to protect him or her along with loved ones. A backup plan comes in handy if something unexpected occurs, such as the death of a beneficiary. It also gives a person the flexibility to know that a person’s wishes will still be implemented.

Developing a Plan B for an Estate

There are some factors to consider when developing a “plan B” for an estate.

Simultaneous Death Clause

When a single event or accident claims the lives of two persons with entwined estates, it’s often difficult to establish who died first. That can add a unique set of challenges to the asset transfer process, especially in a married couple that each listed the other as the principal beneficiary.

A simultaneous death clause helps guide estate taxes and determines the final direction of the inheritances by stating which person should be considered to have died first. This clause must be as clear as possible – it should specify one spouse as the first to pass away and the other as the second to pass away.

Heir Protection

When a contingent beneficiary is a minor or a person with special needs, it’s a good idea to have money held in trust for his or her benefit instead of putting it directly under his or her control. This could prevent potential misappropriation of the money or seizure for debt collection.

Survivorship Deferrals

Specifying that all inheritances are subject to the condition that the beneficiary survives the testator by a specified period of time is helpful. Such a clause enables the asset to automatically pass to the contingent beneficiary if the heir dies soon after the testator does.