Despite the fact that I grew up on the Monterey Peninsula, I am a diehard Green Bay Packers fan. A few weeks ago, my wife and I took an excursion to Wisconsin to attend a Packers game at the house that Vince Lombardi built, the “frozen tundra” of Lambeau Field. I was looking forward to seeing one of the premier quarterbacks in the league, Aaron Rodgers, put on an offensive masterpiece. Unfortunately, seven plays into the Monday Night game against the rival Chicago Bears, Rodgers was injured and never returned. Here we traveled halfway across the country only to watch backup quarterback Seneca Wallace struggle through the game. A guy behind us kept saying, “This was not the game I expected.” I agreed: things certainly did not go according to plan. Sometimes football – as life – is unpredictable.
When it comes to estate planning, you might have a well-thought out plan as far as how your assets will be managed during your incapacity, how they will be distributed upon your death, who will carry out your wishes, and who will take care of your minor children. However, it is often overlooked that your expectations might be thwarted by the unpredictable nature of our ephemeral world. When I ask my clients about alternative plans should their expected beneficiaries pre-decease them, they often reply by stating that they never thought of the possibility. One of the most common oversights of estate planning is the failure to drill down into possible contingencies should “Plan A” fail. Below are some of the aspects of estate planning for which you should have a contingency plan.
As hard as it is to contemplate the possibility, there is a chance that your expected beneficiaries could pre-decease you. While it is true that the nature of a revocable estate plan allows you to make changes in the future, you might not have the mental capacity or the opportunity to alter your estate plan in the event of a family death. A comprehensive estate plan anticipates the possibility that your primary beneficiaries might pre-decease you and names secondary and even tertiary beneficiaries. It can be agonizing to unpack these issues but doing so ensures that your wishes will be carried out in a variety of scenarios and saves your loved ones a family squabble or even a courtroom battle.
Alternate Successor Trustees / Power of Attorney Agents
Just as it is possible that your beneficiaries could pre-decease you, the person you name as your successor trustee or power of attorney agent might be unable or unwilling to act for you in the event of your death or incapacity. Not only could the person be pre-deceased or mentally incapacitated, but when the time comes to act, the person might decide that the task is too burdensome or time-consuming and might decline to act. A comprehensive estate plan names alternate successor trustees and/or alternate power of attorney agents to ensure that somebody whom you trust will execute your well-thought-out plan. The best estate plans will further provide a procedure for filling a trustee / power of attorney agent vacancy should none of the persons you name be willing or able to act “when duty calls.”
Guardians for Minor Children
Failure to plan for contingencies is perhaps most problematic with regard to guardians for minor children. In addition to the need to name alternate guardians should the first choice be unable or unwilling to take care of your minor children, a common mistake is to name a married couple as “joint guardians.” Such a course of action does not account for the possibility that the couple could get divorced. In such a situation, it will not be clear whether you intend the husband or the wife to be the guardian or whether you’d prefer to skip them all together and go to the next named guardians if any.
Furthermore, it often takes time for a court to officially appoint a guardian of minor children even if you properly named such guardians in your estate plan. In the meantime, the children will likely be placed in the custody of child protective services as opposed to trusted family members or friends. A prudent approach is to take a further step and name “temporary guardians” whereby law enforcement and child protective services are instructed and requested to place minor children in the custody of designated individuals until a permanent guardian can be appointed by the court. A comprehensive plan will have alternate temporary guardians as well.
Comprehensive estate planning necessarily includes detailed contingencies should your primary vision of the sequence of events should you become incapacitated or pass away be thwarted by the unpredictable nature of the world.