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Estate Planning Lessons From Carrie Fisher & Debbie Reynolds: what happens with successive deaths ?

Uncategorized Jan 3, 2017
post about Estate Planning Lessons From Carrie Fisher & Debbie Reynolds: what happens with successive deaths ?

In late 2016, the world was rocked and saddened by the passing of not only one screen icon, Carrie Fisher, but also her mother, actress Debbie Reynolds. What can you learn from these “quick” deaths as you plan your own estate?Yes, family can “go” quickly after the loss of a loved one, estate planning attorneys reveal. But, often, this is most common with long, close marriages of spouses who are in advanced years. When one spouse passes, it is not surprising that, many times, but not all the time, the surviving spouse or widow, passes within a year or so. In the case of the Star Wars princess, Fisher, and her mother, Debbie Reynolds, however, this was mother-daughter, not spouses.  This quick succession of death in a family can cause people who are planning  their estates to take pause.After all, this was not a case of two long-married spouses.  And this was not the case of the surviving spouse passing away in the following  year. This was mother-daughter and days.

Well, it seems that whenever there are celebrity deaths (think Robin Williams, Phillip Seymour Hoffman), particularly un-expected deaths, it causes us to consider our own mortality.And celebrity estates cause us to consider, perhaps re-evaluate, our own estate plan. And, let’s face it, now, year end, or, the beginning of 2017, is the time when most of us re-examine our own estate plans.So, you may be asking, what would happen to my estate if my spouse or loved one passed right away, right after I died? Have you planned your estate for successive deaths? Well, the short answer is that you probably have. You just may not know that you have. And you may not have considered what will happen to your estate if your beneficiary dies shortly after you do. The answer, of course, is probably in your existing estate plan.

Your will or revocable trust, no doubt , “tells” everyone “who gets what” if you pass.  The will or living trust are your “main dispositive vehicles” as trust officers like to say, doling out inheritances, property, real estate, and good cold cash. But, have you thought about what to do if your beneficiary or spouse does not survive you, by, say, 30 days?  A year? Many estate planning attorneys, or probate lawyers, who write wills and trusts, suggest that you do. And I’m not talking about disclaimers or disclaimer trusts or QTIP trusts.  Why? Because in 2017, each US citizen who dies can leave an estate of $5.49 Million free of the estate tax. That means that if you are married, and you and your spouse are planning your estates together, you can leave nearly $11 Million free of the estate tax! Wow. OK, so, what’s the take away? The take away is that disclaimers and estate tax savings are not a concern for, like, 99% of Americans. So, the focus should shift, suggest some financial planners, to wealth management: how will your money and estate be inherited when you pass away?

To get back to the Carrie Fisher and Debbie Reynolds issue: have you considered if you want your estate to pass differently if your wife, or husband, or spouse, or main beneficiary, does not survive you by, say, 30 days? Your estate plan, your will or living trust, probably makes a provision for survival.  That is to say, you have to survive to inherit.  Many estate plans have a clause which says something like this:  “I leave my estate to my beloved husband if he survives me.  If he does not survive me, then my estate shall pass to ________________”. Does it matter if your spouse or beneficiary survives you by, say, 30 days or not?  Perhaps.  But maybe not.  After all, you are gone.  Nothing for you to worry about at that point, right?

Alternative provisions, or inheritances, in a will are a good idea, say most estate attorneys.  Who inherits if your main beneficiary is not around right after you die? If you left all of your estate to your spouse, and then your spouse died the day after you did, then that spouse still inherits.  Yes, even though she or he only lived one more day than you did.  Even though they are now deceased. UNLESS, of course, you conditioned the inheritance, for example, of that spouse to live, or survive you, by, say, 30 or 90 days.  In this little example, your spouse, now your spouse’s estate, inherits all of your estate.  And now, that spouse’s estate, and what your spouse inherited from you, “goes” to your spouse’s beneficiaries. Probate lawyers caution people who plan their estates that this may be a big issue in second marriages with adult children from a first marriage or prior relationship.  It’s common that you may want to take care of your second spouse during her or his life, and leave the rest to your own children from your first marriage.  And vice versa: your 2nd spouse probably wants to leave her or his estate to her or his own children from a prior marriage. So, when you review your estate plan with your probate attorney, consider whether you would change your estate plan or revocable trustand who inherits your estate– if your main beneficiary, or spouse, dies within a week or so.  Or, maybe even within a year.  You might be surprised to learn that you will change your estate plan when you consider inheritances from this perspective.