Perhaps one of the most challenging aspects of the estate planning process is discussing and laying out instructions that address everything that could possibly go wrong. It’s bad enough to have to think about what might happen to your loved ones and the assets you’ve gathered over your lifetime, but to have a really comprehensive estate plan, you have to think even further. You have to ask yourself questions like “What will happen to my assets if my trustee(s) die(s) before I do?” and “Who inherits what percentage of my estate if my children don’t survive me?” You might be very careful about selecting a specific person to inherit your assets should the worst occur, but what happens if the person you select passes away before you do?
California law, (in the absence of more specific instructions) states that the children of a trustee (or your grandchildren, if you nominate your child[ren] to inherit your estate) are known as the Living Issue and have the Right of Representation to claim (and divide equally) whatever their parent(s) were set to inherit. Typically, this happens at the level of the closest generation, meaning that if you have two children who pass away before you, and they have differing numbers of children, (say one has one child and the other has three) the estate will still be split 50/50 between groups of grandchildren. In this hypothetical situation, the single grandchild would inherit his or her parent’s share (50%) while the other three would split their parent’s half between themselves, (each getting about 16.5%)
If this lopsided arrangement troubles you, rest assured that there is a way around it. A “Living Issue by Right of Representation” clause that specifies exactly the distribution you wish for can make things more equal in the very worst of circumstances. Specific wording can change the way your grandchildren inherit the assets of your estate, making the distribution more fair than the law might otherwise dictate it to be. Remember always that it is your estate. You have the power to bestow or deny your legacy upon anyone or any organization in any percentage you deem fair. A good attorney can draft you an estate plan that will protect your assets from probate, but it takes a truly great attorney with extensive experience in estate planning to spot the little loopholes, potholes and problems that can hang up the process of getting your legacy to those you love the most in exactly the manner that sounds best to you.
Rayo Law Offices Can Help:
Call (916) 668-9606 or (925) 825-1955 or contact Zachary Rayo online to set up an appointment for an initial “meet and greet” consultation.