Making an estate plan involves a number of extremely important decisions. You have to decide who will inherit your estate. Then, you need to determine how to divide your estate among your chosen beneficiaries. But what happens if your circumstances change over time?
Sometimes, individuals think that they cannot make revisions to an estate plan based on a change in circumstances. The truth is that any provision in an estate plan can be changed at any time prior to your death — and your plan should be changed to accommodate significant changes in your life.
Reservations about choosing beneficiaries, allocation among beneficiaries, and the perceived permanence of estate planning decisions often result in individuals refraining from creating or changing an estate plan. That should never be the case. When these hesitations or issues arise, your estate planning attorney can answer your questions, put your mind at ease, and help you resolve any issues involving your estate plan.
The best way to illustrate how these kinds of issues arise — and how your estate planning attorney can help to resolve them — is through an example based on a real-life situation. This particular illustration involves circumstances that many families face as parents age.
Mary is a widow who is approaching her 90th birthday. She has two grown daughters, Nancy and Irene. When Mary’s husband passed away ten years ago, she created a new estate plan that includes a trust. On her death, her two daughters inherit through the trust in equal shares. Mary told her daughters about the plan and her intention to divide her estate equally between them.
As Mary grew older, she began to need help in her daily life. Nancy moved back home to take care of her. Irene did not help to care for her mother.
Nancy grew resentful of the fact that Irene would inherit an equal share of Mary’s substantial estate, even though only Nancy devoted so much of her time to caring for Mary. Nancy talked to her mother about her concerns.
Mary understood why Nancy was upset, but she didn’t know how to alleviate the concerns. She remembered that when she created her estate plan, she felt strongly that both of her children should share equally in the estate. Mary didn’t think that she could change that decision.
Fortunately, Nancy convinced Mary to talk with her estate planning attorney.
Estate planning decisions, including beneficiary designations and allocation of assets, are not irreversible until the person making the estate plan passes away. If the circumstances in your life change in a way that affects decisions you made when you created your estate plan, talking with your estate planning attorney is the best way to resolve issues relating to those changes. (This is just one excellent reason why you should never use DIY forms to create an estate plan.)
An important part of an estate planning attorney’s role is helping clients identify beneficiaries and determine the allocation of the estate among those beneficiaries, if a client is uncertain in either regard. Equal allocation among beneficiaries is not the only option. Sometimes, circumstances warrant a different distribution.
In Mary’s case, her attorney explained that Mary could change the allocation of assets in the trust, if she wished to do so. Her lawyer also offered another option that might address her situation.
The situation that Mary faced is not at all unusual. When an elder needs assistance, a family member frequently steps in to provide the necessary care. If the circumstances continue over time, so that one family member becomes the elder’s primary caregiver, tension with other family members may occur. That’s exactly what happened in Mary’s family.
In some cases, changing the distribution in an estate plan to increase the family caregiver’s share might be a possible solution. But there is an alternative that could resolve the concerns without revising the estate plan and beneficiary allocation.
Increasingly, families addressing this situation are turning to caregiver agreements (also sometimes called personal services or personal care agreements) to compensate family members who fill a role similar to that of an outside caregiver. Any specific situation should be evaluated carefully before putting this type of agreement in place, to ensure that it is an appropriate solution for the circumstances.
Estate planning attorneys frequently assist clients who encounter family caregiver situations that lead to tension within the family. Resolving those issues enables all family members to focus on the elder’s needs, rather than fixating on disputes among themselves.
In the end, Mary settled on establishing an agreement to compensate Nancy for her caregiver responsibilities, which resolved Nancy’s concerns. That strategy enabled Mary to keep the equal distribution in her estate plan. But she now understands that she retains the ability to change her plan, including the allocation of assets, if she wishes.
In our Cartersville estate planning practice at Asset Protection & Elder Law of Georgia, we assist clients with all aspects of creating and maintaining an estate plan. When changes in your life affect your estate plan, we are here to help you find the best solution. Our practice also includes all matters relating to elder law, which enables us to assist with situations that arise as family members age.
We provide legal services to clients throughout the communities northwest of Atlanta, including in Bartow County, Cobb County, Cherokee County, Gordon County, Floyd County, and Paulding County. Call us at (770) 382-0984 or contact us through our online form.