How To Make Your Estate Plan As Ironclad As Possible
No law firm can guarantee that an estate will survive every possible challenge. However, you can do a handful of things to improve the odds that your estate planning will be as ironclad as possible.
Plan for Taxes
Federal, state, and local governments have the best chances of upending an estate if the decedent's taxes aren't paid in full. They have immense leverage to demand payment. Also, they can force an estate with unpaid debts into probate or bankruptcy if it proves incapable of paying all of the outstanding tax bills.
Make sure your estate carries enough cash or assets that can be liquidated easily so the executor will be able to pay the taxes with no trouble. You are better off leaving the executor the minor issue of distributing the excess allocation than risking the government forcing your estate into probate or bankruptcy.
Even if you have a relatively small estate, regular updates are important. Try to discuss your situation with an attorney at least every few years. If you have a large or complex estate, you may want to meet with an estate planning lawyer regularly. You should also consider updates after changes in political power because these shifts often lead to revisions to estate law.
Updates are also prudent after major life changes. Marriage and divorce are huge ones. The birth of a child also will affect an estate. If your relationship with a beneficiary has changed significantly, you may also want to update your documents.
Employ All Available Legal and Financial Vehicles
It is easy to think of the will as the primary vehicle of an estate. However, ironclad estates that survived the most challenging situations have often employed other legal and financial tools.
Trusts are often critical to insulating assets from litigation, for example. Especially if you work in a profession where people sue practitioners frequently, a trust is an invaluable tool. You should also establish a trust if you wish for your estate to care for a loved one if you pass first. A trust can provide support for housing and medical costs while also offering money for everyday living expenses. Properly configured, a trust will kick in immediately upon your passing. This can ensure that money will be there on the day after rather than going through the whole process.
You should look at payable-on-death benefits, too. These are instructions on accounts telling the institutions to transfer the account or pay its contents to a beneficiary. All they have to do is present a death certificate.