What will happen to your estate if your primary beneficiary—the person you name to inherit your assets—dies before you do? If your estate documents do not name an alternate beneficiary, then your estate will be divided according to state law—which might mean it will go to someone you don’t like, or someone who is unable to handle significant assets.
For example, suppose your estate plan divides your estate equally among your children. If one child dies before you do, what do you want to happen to that child’s portion? Should it be divided among the other children? Should it go to the deceased child’s spouse, or to the deceased child’s children? What if the grandchildren are young —should it go into a trust for their benefit or be held within a custodial account until they reach a required age? Of course, if something should happen to one of your beneficiaries, it is usually possible to rewrite your estate documents later. But what if you are incapacitated at the time, and cannot make amendments to your documents?
That is why it is always good to include alternate beneficiaries in your estate documents, so your wishes will be observed even if you cannot rewrite your documents as circumstances change.
Ms. MacDonald’s practice is limited to Estate Planning, Probate, Conservatorships, Elder Law and Trust Administration. Ms. MacDonald maintains her practice in the Santa Clarita Valley at 25115 Avenue Stanford, Suite B-124 in Valencia, California. She can be reached at 661-294-6464.