(This is Part 3 of a three-part blog.)
H. DEATH. Premature deaths can wreck a plan if there has been no thought given to the various possibilities. Premature deaths change needs. Death creates estate taxes and hence liquidity needs. Do you want to sell the assets? Is life insurance an option? Is second to die life insurance an option? Can an irrevocable trust be used for life insurance ownership?
I. LONG LIFE / LONG ILLNESS. A long life and/or a long illness will have the same detrimental effect as death except the money drain can be long and continuous. Today, with the long life expectancy, provision should be made for long term care and its effects. Secondly, when does the older generation give way to second or third generations as the operator/manager of the family business or assets? What plans have been made for succession and by whom?
J. SECOND MARRIAGES. The opposite of divorce, what expectation does the second spouse have? How is he or she provided for? What is their participation to be in the family assets? How do the children feel about their stepmother or stepfather? Prenuptial agreements can resolve many of these issues before the spouses marry and satisfy all parties. Issues, such as these, should be thought through before the fact and provided for in a binding agreement between the spouses.
For all your estate planning needs, contact us for assistance. Also, please visit our website at http://www.showspowell.com/.
