After setting up an estate plan, changes in circumstances might warrant a revision of your plan. One situation in which this might be true is when a beneficiary of your estate plan passes away. After the death of a beneficiary, it is a good time to visit with a skilled estate planning attorney to make whatever revisions are necessary to ensure that your plan is fully up to date.
Common Estate Plan Revisions After an Heir Passes Away
Amendments to Your Will
If a beneficiary in your will dies, there might be some uncertainty about what may happen to that person’s share of the estate if no changes are made. This depends largely on how the will or trust is drafted and its specific language around this issue.
For example, your will might state that a beneficiary cannot receive property from the estate unless he/she survives you by at least 45 days. If that requirement is not met, then their share of the estate is typically divided among the other beneficiaries. Alabama Code – Section 43-8-220 also addresses this issue with a requirement that the devisee (beneficiary) survives the decedent by five days unless the language of the will state otherwise.
Even though there are provisions in state law as well as possible provisions in the will that deal with the death of your beneficiaries and their share of the estate, it is still a good idea to review your will with an attorney and see if it needs to be revised.
Another reason that you may need to revise your will after a beneficiary passes away is if your deceased beneficiary was also named in the will as guardian of your minor children or your personal representative. The situation could arise if someone leaves a portion of their estate to a sibling and this sibling is also designated to be the guardian of their children. When this happens, you will need to make sure to designate someone else whom you trust for this role.
Amendment to Your Living Trust
If you have a revocable living trust wherein the deceased beneficiary is supposed to receive a share of the property or a share of the revenue that the assets within the trust generate, you may need to amend the terms and conditions of the trust to ensure that whatever they were supposed to receive is allocated the way you intend it to be.
For example, you might want the deceased person’s share to be distributed equally among the other beneficiaries of the trust, or you might want that person’s share to go to their spouse and/or children. As with your will, it is possible that you already have language in your trust that deals with this scenario, but it is best to review the document with an attorney to make sure.
Amendment to Your Powers of Attorney
The deceased may be designated as a financial power of attorney, or power of attorney for healthcare, or both. If that is the case, then these documents may need to be revised or rewritten to name someone else whom you can trust to handle these important matters if you are no longer able to.
Changing Life Insurance Beneficiaries
The deceased person may be a sole beneficiary or a co-beneficiary on your life insurance policy. If this is the case, you will need to review any life insurance policies that you may have and make the necessary changes.
It may be that the person who is passed away is the primary beneficiary on the policy, but even if you already have secondary or contingent beneficiaries, it is best to get their name removed and designate someone else as the primary beneficiary. If this person is one of multiple primary beneficiaries (i.e., co-beneficiaries), then you will want to remove their name and decide how their share should be divided among the remaining beneficiaries.
Work With Our Seasoned Southern Alabama Estate Planning Lawyers
Revising an estate plan is sometimes necessary when there are life changes, and the death of one of your designated beneficiaries, whether for a will, trust or financial account, is one such instance when it is a good idea to review everything with an experienced estate planning lawyer. Your lawyer can advise you on what revisions need to be made to ensure that your plan still accomplishes all of your objectives.
For skilled estate planning guidance in southern Alabama, contact Stone Crosby, P.C. for assistance. We have been serving clients in this area for over a century, and we are available to help you with your legal needs. To get started, call our Daphne, AL office today at (251) 626-6696 or send us an online message to set up a consultation with one of our attorneys.