(Forbes) George H.W. Bush led an extraordinary, well-lived life during an exciting time in American history.
In any discussion of his life and accomplishments, his late wife Barbara quickly comes to mind as well.
Theirs is a well-documented and iconic love story.
From the battlefields of Second World War to the White House and beyond, the romance and connection between them was felt by all who saw them together.
That is why George’s death less than eight months after Barbara’s may not really feel like a surprise.
The death of a longtime married couple in quick succession is often explained as “broken-heart syndrome” or “widowhood effect” - a romantic notion that two hearts are so entwined that they can’t bear to be without each other.
George Bush’s death wasn’t specifically due to heart issues, but by all accounts, he was ready to go after his final summer in Kennebunkport.
While it is a romantic ending to the Bushes’ time here on earth, the time between their deaths raises practical issues of estate planning.
Timing is key in an estate plan and if the deaths of married partners occur within a short period of time, it can make the administration of an estate more challenging. This issue is not uncommon.
“The statistics are high especially for older couples who had close marriages, dependent on each other,” says Paula Leibovitz Goodwin, partner in the Personal Planning Group at Perkins Coie LLP in San Francisco. “There is complexity when dealing with two deaths.”
Timing Is Key
While the passing of long-time married spouses in close succession is common, how the estate will be handled is dependent upon the time between the two deaths and the details of their estate plan.
“Often trusts or wills have survivorship provisions requiring a spouse to survive for a specified period of time,” explains Leibovitz Goodwin.
One example of where this provision would apply is the case of Judith Leiber and her husband who passed away in quick succession earlier this year. Leiber had built an empire creating sparkling clutch purses for socialites in whimsical shapes such as asparagus, cupcakes and swans. When she passed away in May of 2018, her New York Times obituary noted that Judith had died just hours after the passing of her husband of 72 years – and both died of heart attacks.
“If a spouse dies within a certain period – let’s say 2-3 weeks – they could be treated as having predeceased the other spouse and that may have implications under the document,” says Leibovitz Goodwin.
As a result, instead of having to probate the two estate successively, the estate administration is eased into a more streamlined process.
When There Is A Greater Time Gap
But for the Bushes, such a provision wouldn’t help in their situation as almost eight months had passed. This is where strong estate planning can help. With a long-term marriage of older spouses, it may be important to move quickly to take advantage of having the estate flow a certain way.
“Does the estate pass from 1st spouse who died to survivor, and then from survivor to others, or does 1st spouse’s assets pass to their next level beneficiaries and surviving spouse’s assets pass to their next level beneficiaries? Bottom line,” Leibovitz Goodwin says, “is that you need to read the documents carefully to see what the impact of this would be.”
In moving quickly, one tool that Bush and his advisors might have made use of is a qualified disclaimer – this is where a beneficiary makes an irrevocable election to refuse to receive an interest in the property. This can be an effective tool, especially on assets that the survivor does not need.
Beneficiary Designations Can Also Be A Minefield
When spouses pass within a short period of time of each other there may be challenges with beneficiary designations. Most spouses leave their retirement plans to the surviving spouse, with their children being contingent beneficiaries. But when death occurs in quick succession, the second spouse to die likely hadn’t yet rolled the first’s retirement account into their own account with beneficiaries, and that causes challenges.
“Consequently, all of this results in having no beneficiary and the retirement ends up going to the “estate” of the first spouse,” explains Leibovitz Goodwin. “This results in a probate and the inability to stretch out retirement distributions.”
As a result, when one spouse passes, it is important that the surviving spouse quickly roll the retirement account over to ensure the intended beneficiary planning will work.
Other solutions might also be considered. In scenarios like the Bushes, where the surviving spouse might not need the funds, it might be prudent for the couple to rework their beneficiary planning to pass over the spouse and distribute immediately to the children in an inherited IRA.
A Story Book Ending
Spouses dying within a short time of each other may be romantic, but it is important that their estate documents are prepared for this. Engaging the appropriate advisors to help manage the process and think strategically about timing is key so that the estate plan provides clarity on how to handle the situation.
George and Barbara Bush likely had good planning in place to allow for an organized estate administration, but they also focused on the right things while alive. As Barbara Bush said at a college graduation in the 1990s, “At the end of your life, you will never regret not having passed one more test, not winning one more verdict or not closing one more deal. You will regret time not spent with a husband, a friend, a child, or a parent.”
