Simultaneous Death and Survivorship
In 1982, the cyanide-laced Tylenol murders in Chicago shocked the nation. In the aftermath of the scandal, the lawsuit of Janus v. Tarasewicz became a little-known example of why statements of survivorship are critical in your estate planning. Stanley and Teresa Janus both took Tylenol within minutes of each other, but only Stanley was pronounced dead. Teresa was pronounced dead a few days later. If Stanley had known his wife would die just days after he did, he might have wanted his life insurance money to go to his mother. But Stanley’s $1 million life insurance policy went to Teresa’s family. Technically, for the few days that Teresa was in coma, she was a millionaire.
If you did not include any contingencies for simultaneous death in your estate planning, contact a lawyer to add this critical information. There are various ways to account for simultaneous (or nearly-simultaneous) death. You may want to consider adding a time-based clause, such as 30 days, to ensure your money gets funneled to the most appropriate family members. For example, if your spouse dies within 30 days of your death, any life insurance benefits and inheritance will get redirected to different family members.
As in the Janus case, life insurance benefits are typically the most contested asset. Simultaneous death is commonly caused by accident or unexpected tragedy — car crash, house fire, etc. The victims tend to be younger and carry high-value life insurance to protect the young children or elderly parents that will need expensive care.
Complicated family structures also make simultaneous death a difficult issue. Previous marriages, adult children, and new spouses can make for a messy fight between the surviving family members. Don’t ignore this critical matter in your estate planning.