Planning for worst-case scenarios can bring out the eternal pessimist in people. Even in the best of times, a moment or process can be ruined if someone just starts thinking about all of life’s “what-ifs”. Planning your will can be an uneasy and gloomy process, but it’s the right time to think of those “what if” scenarios. As we don’t need to preach to you that death and taxes are the only two things we can absolutely count on.
There are all sorts of things to consider when planning a will, or even when updating a will. It may seem obvious, but it’s impossible to change your will once you’ve passed; you want to make sure every possible situation or scenario is covered so that everything goes the way you’d like it to, and it doesn’t cause any further stress to your family and loved ones.
Take the following for example.
A farmer decided it was time to transfer his land along to his two sons since they would soon begin doing the bulk of the work. So he went and got the paperwork taken care of and transferred the family farm to each of his sons.
His first son, Jordan, was married with children. His second son, Jack, had no children and was unmarried.
After the farmland was transferred, worst-case scenario struck – Jack unexpectedly died, and in his will stated his brother, Jordan, was the beneficiary of his estate – which now included the farmland.
As a result, Jack’s final tax return had to include a disposition of the farmland at fair market value and his estate now needed to pay a substantial amount of tax.
If Jack had planned for this scenario potentially happening, he could have updated his will to revert the land back to his father if Jack died before his dad – and there would be no tax owing.
At this point, the farmer could either hold onto the farmland, or he could transfer the land over to Jordan. By doing this, there would be no tax owing and Jordan would still wind up getting all the farmland.
Whenever things change in your life, especially milestone events like children, marriages, or acquiring new assets like a house or land like Jack, it’s important to reconsider your will. In this situation, events had to unfold in a specific way, but these are the types of things our trusted advisors can help you plan for and navigate.
At JMH, we’ve seen and dealt with so many different wills, and every person is different. We’ve had to think of all sorts of different hypothetical, worst-case scenarios. We can help shed some light on your will, and help you plan your estate for whatever can come your way.