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The importance of contingencies in an estate plan

Many New Yorkers assume that they will pass away before their spouses or their children. However, it is possible that a beneficiary could die before they are able to collect their inheritance, and this could cause many estate planning issues. In fact, it is possible that two people could die at the same time.

To account for such a scenario, it may be a good idea for married couples or others who have intertwined estates to include a simultaneous death clause in an estate plan. This will determine who should be deemed to have died first for legal purposes. It could play a significant role in determining who receives assets or how much an estate may owe in taxes.

It may also be worthwhile to add a survivorship deferral to an estate plan. This may prevent an asset from going through two different estates in a short period of time. If the first beneficiary dies within the survivorship period, the asset would automatically go directly to the second beneficiary. If all named beneficiaries have already passed on, it may be worth indicating whether assets should go to a charity as opposed to a very distant relative.

Wills and trusts may be effective tools to help an individual create an estate plan as they allow greater control over where assets go after death. While an estate plan may be crafted without legal help, it may be a good idea to have such a plan prepared by an attorney who can ensure that the documents comply with state law. It may also be worthwhile to have an attorney review any estate plan documents that currently exist to ensure that they still meet the client's needs.

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