Your estate plan is designed to accomplish many things. One of these things is to give you and your loved ones peace of mind from knowing that you are truly prepared for whatever comes next. With a comprehensive estate plan, you can be confident that, come what may, your plan will be ready.
There is common saying among people in the various planning fields. This saying encourages people to “expect the best but plan for the worst.” Planning for the worst is a wise and cautious way to make sure that, whatever comes your (or your family's) way, you are ready. Your estate plan can benefit from this type of thinking as well.
There are several things you can do in order to make sure that, even if the nearly unthinkable happens, your plan can handle it. One example of this type of circumstance is having the deaths of you and your spouse take place in close succession. Depending on just how close your deaths might be, this situation could cause problems for your family.
Some people sometimes say that they hope they pass away at the exact same time as their spouse. Of course, if that happens in real life, it has the potential to cause complications if your and your spouse's estate plans, like a lot of people's plans, leave everything (or a sizable distribution) to the surviving spouse. If you die together, did your spouse survive you or not?
There is a statutory system for dealing with these types of circumstances. It's called the Uniform Simultaneous Death Act. Like intestacy laws, it is a one-size-fits-all system set up by the state legislature. How close together do your deaths have to be to be count as “simultaneous”? It varies from state to state, ranging from 120 hours to 120 days.
If you don't want to leave your plan's distributions up to your state's laws, there is a way to take control. You can simply insert a simultaneous death clause into your estate plan. In this clause, you can state that, if you and your spouse die together (or die in a manner that makes it impossible to tell who died first,) then your assets shall be distributed as if you died first. (You can also make the clause say that, in cases of simultaneous death, your spouse died first. The order is up to you.)
Of course, simultaneous deaths may not be your only concern. For example, what about having your deaths fall close together but just outside the definition of “simultaneous deaths”? If your plan centers around Last Wills and Testaments, this may force your family into having to go through probate administration twice within a very short period time. Obviously, one way around that is to plan to avoid probate and include one or more living trusts in your plan.
Another way around this problem is to include another clause in your plan that says a beneficiary must outlive you by a set period of time in order to receive his/her distribution. Whichever method you choose, the scenario of simultaneous deaths is just one of many that demonstrate the many various things that can happen to your family and complicate estate planning matters. The best way to protect yourself is with a truly comprehensive plan that ensures that your plan has planned for all reasonably possible possibilities.