What If I Die Tomorrow

What Would Happen if I Die Tomorrow?

The answer to that big question is a composite of your responses to a range of smaller questions. Mull over the following questions, and if the answers or implications are not clear, or if they trouble you, make a note of it – a real note, not just a mental one. You will then have a list of issues on which to focus, and the simple act of writing things down is invaluable in clarifying the thought process.

Many people, who have been uneasy for years thinking about this, find it improves their peace of mind just to make themselves spell out exactly what bothers them. Look over this list. Of course, not all questions will be pertinent to everyone.

  • Would there be mistrust, uncertainty, and bickering among your survivors in deciding how to handle your property and wrap up your affairs? Is there anybody who, if not prevented, might actually take your property or funds without authority?
  • Do you have a will that reflects your current wishes? If so, is all your property actually subject to probate court and the terms of the will – or is it instead set up to pass another way at death – e.g., through a beneficiary designation form, as with a 401(k) account, or to a co-owner, as with a joint bank account?
  • If you do have property subject to probate (e.g., furniture; a house, or an account in your name alone), but do not have a will, what does your state’s law of intestacy say about who takes property after a person’s death?
  • What are the needs, abilities, and weaknesses of your survivors, especially your spouse and children, if any?
  • Are your survivors responsible individuals, capable of managing and using an inheritance wisely if they receive it outright? Or will they need protection from their own youth, financial inexperience, or bad habits? What about the influence of others? Would your bequest to a child need protection from his or her spouse?
  • If your current spouse is not the parent of your children, how – and when – would your estate be divided among them?
  • What kinds of property do you own, e.g., real estate, mutual funds, a family business, etc.? Can your property get along without your active management, at least for a while? How much of it could easily and quickly be converted to cash, if necessary, at reasonably good prices?
  • Is the net worth of all your property more than the amount at which the federal estate tax begins to bite, and tax planning is called for?
  • What are your responsibilities to your survivors? Would you be leaving young children and the surviving parent, for example, with sufficient assets to maintain the family’s standard of living? Or, in contrast, do you have grown children, with good jobs, and a spouse with his or her own adequate retirement plan account?
  • If your children are under age eighteen, have you found a suitable guardian for them in case their other parent also dies?
  • Do you have a disabled child or family member who must be provided for separately, for life?
  • If you have an IRA or retirement plan account, have you selected the appropriate beneficiary and distribution options?

What Would You Want To Happen, If You Died Tomorrow?

If you have made a troubling realization or two after considering the above questions, the more immediate issue might be what you do not want to happen. The top priority is probably the potential situation you have identified, and how to correct it.

Frequently, an easy solution will suggest itself, simply as a result of thinking through the problem. (If not, be smart and see an attorney experienced in estate planning. He or she has most likely dealt with many situations much like yours.)

Some peoples’ values, wishes and survivors’ needs, however, really are very simple. So, too, should be their estate plans – perhaps just a two page will saying, for example, “Everything to my three children, in equal shares.” Other people have various contingencies to plan for. Some form of charitable contribution – during life or at death – might be part of their plans. There might be a need for life insurance.

Many want to keep one or more “strings attached” to payments made to their chosen beneficiaries. These “strings” come in infinite varieties, but almost always, keeping strings attached requires a trust. (Trusts are examined in detail in other tutorials.)

A trust document can be drafted to set forth a personalized combination of specific instructions, with or without discretionary judgments allowed to your trustee, so that money is given to whom you want, when, and for the purposes you specify. This cannot be done with a will alone.

A practical example of this point is the use of a trust by parents, in case they both die prematurely, to avoid the immediate distribution of assets to their kids, upon turning eighteen.

Choosing The Right Executor and Trustee

Choosing a personal representative may be the most important estate planning decision of all to maximize the likelihood that your wishes are followed.

Personal representative is a generic term, referring to an executor or a trustee, who is named in a trust to carry out its terms.

An administrator is also a personal representative, and is court-appointed to perform the executor’s duties, when a decedent has no will. Unfortunately, the person appointed might be a family member whom the decedent would not have wanted.

Alternatively, the court might find it appropriate to choose a neutral third party – usually a lawyer – to serve as administrator. In the latter case, the estate is responsible for paying the administrator an hourly fee for all services performed.

Any of these personal representative roles can be filled by an institution, such as a bank, as well as by an individual. Obviously, however, whoever serves should be capable of doing the job, and this is a matter that often deserves much more thought than it is given. In many cases, relations among the surviving family are harmonious, there is little to be done, and everything works smoothly – no matter who is running the show.

When disputes arise or there is bickering, however, family diplomacy might be called for. Remember that some of us are better at this than others. Occasionally, on the other hand, someone must be ready, willing – and authorized – to “lay down the law,” and get things done. The selection of this person (or institution) should not be left to chance; he or she should be named by the decedent in a will or trust.

Your personal representative, in most cases, is going to have – by necessity -extensive, if not total, access to your property. Very bluntly, a trustee, executor, or administrator is in a position to rob you (or your heirs) blind, or to ruin your plan through inaction, if somebody else acts improperly. Indeed, misconduct is probably the most common factor in estate and probate horror stories.

Of course, objections or complaints can be filed in court. But these can be difficult moves, and they are made after the damage is at least partially done. There is no close court supervision to prevent the misconduct. Therefore, you should not move forward with any plan, unless you feel comfortable with the person or institution you have chosen.