By: Olivia R. Holcombe-Volke, Esq.
Effective estate planning must contemplate not only your own desires or preferences as to whom or what will receive your estate after death, but also what impact that inheritance might have on the beneficiary. The most common example of why and when this is important is when an intended beneficiary has special needs and is receiving public benefits, in which case a supplemental needs trust may be necessary to protect both the beneficiary and the inheritance. Other less obvious circumstances faced by beneficiaries who receive your inheritance deserve contemplation too, though.
A beneficiary who is receiving public benefits for a reason other than disability, for example, and who will therefore face the difficult choice between receiving an inheritance and losing the public benefits, or refusing the inheritance in order to stay on public benefits. For most people, this decision is one between a rock and a hard place, utterly defeating the best intentions of the decedent and the decedent’s estate plan. With careful consideration and planning, this unfortunate result can be avoided.
Another set of circumstances that is likely to lead to more trouble than a decedent intends to cause for his or her beneficiaries is one in which property is left to two or more beneficiaries who don’t get along. This reality can lead to infighting, which, in the worst case scenario, can lead to litigation and the dissipation of assets, thereby wasting the distribution the decedent intended for the benefit of the recipients.
It may be hopeful, but not realistic, to believe that beneficiaries who don’t get along while you are alive will be able to communicate and work together after you die – particularly where money is involved. Again, careful planning can ensure that your intentions achieve a positive result and aren’t wasted by the realities of whom you choose to leave your estate to. The point in all of this is that you may have the very best intentions – but in your efforts to ensure those intentions see long-term success, it is vital to take into account the realities of your beneficiaries and all intended circumstances.
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