Accounting for Common Disasters

Estate planning tends to raise uncomfortable questions. One of them is what happens if you and your spouse die in a common disaster? What happens if you, your spouse, and your children, heirs, or other family die in a common disaster?

No one wants to think about this question, along with the myriad other uncomfortable questions. But if you are creating your wills and trusts, your attorney is going to ask you this question at least once. It's better to consider your options early and have some ideas before you head to your attorney's office to finalize documents.

In general, there are three tiers of beneficiaries included in most wills. The first tends to be the spouse. The second tier tends to be children or grandchildren, or other relatives if you have no descendants. The third tier may be siblings or extended family, charities, organizations that are meaningful to you, or other such entities.

Why are there three tiers? If you, your spouse, and your children all perish in a common disaster, then there is some kind of planning in place for what happens to your assets should that happen. Such a disaster is exceedingly unlikely to occur, but isn't out of the realm of possibility and has occurred several times in my practice. Though In general, you would not need to plan for more than three tiers, I've had cases where I've been calling around the country to let unknown and distant relatives know they are inheriting from that "rich uncle."

Those "typical" tiers of spouse, children/grandchildren, extended family may not apply to you, however. If you are estranged from family, for example, who or what would you designate as your beneficiary? If you have no close friends, who could you list as the second or third tier? If you are unmarried, or if you're widowed or separated, who would be in your first tier?

While uncomfortable and distressing to consider, the question is a necessary one. If you find yourself uncertain, or if there is no one in particular you would want to leave your assets to, you may want to consult your lawyer for advice. They cannot make the decision for you, but they may be able to advise on some organizations, charities, or other offices that you could consider.