I have worked with many people over the years who find it difficult to name beneficiaries in their estate documents. For those with small families, or strained familial relationships, this task can be especially challenging. While most of us can name one or two people who we would want to inherit our assets, the process becomes more complicated after that. Furthermore, if we name someone as a beneficiary that is our age or younger, we tend to assume these individuals will outlive us. Unfortunately, this is not always the case- something recently highlighted by the tragic deaths of actor Gene Hackman, and his wife, Arakawa.
Recent news stories recounted that Hackman and his wife died within days of one another due to illnesses. Hackman’s will left his estate to Arakawa. Evidence indicates Arakawa died first. Since she did not outlive him, there should be specific language in his documents about how his estate should be handled. If Hackman had a living trust (as some reports suggest), additional beneficiaries might have been named. This would alleviate any issues.
Arakawa’s documents leave her estate to Hackman, with a provision that if they died within 90 days of one another, her estate goes into a trust and then a charity. While this provision offers some protection, it also underscores the importance of careful planning in the event that a couple’s death occurs in close succession.
Without clear instructions, and lacking a designated living beneficiary, Hackman’s substantial estate—valued at $80 million—could be subject to the default laws of his state. In many cases, this means assets are distributed to children or the closest living relatives, potentially leading to a protracted and costly legal battle.
While this case involves high-profile figures, the issues they faced are far from unique. Many individuals overlook these crucial details, often due to a lack of guidance or not working with the right professionals. If it has been more than five years since you reviewed your estate documents and beneficiary designations, now is the time to take action and ensure everything is in order. Proper planning can prevent unnecessary complications and protect your wishes in the event of the unexpected.
About the Author
Amelia West, CFP® is a wealth advisor at Total Wealth Planning, a fee-only fiduciary financial planning firm. She serves client families from our Indianapolis (Carmel), Indiana office. Amelia assists clients in creating a sound financial future while serving on the Firm’s Investment Policy Committee and technical financial planning team. Amelia can be reached at amelia@twpteam.com.
