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Hedge fund founder's death marks import of contingency planning

In the course of estate planning, one of the most important questions a person in Pennsylvania may want to address is, what if? One of the key advantages of going through the exercise of formalizing an estate plan is that it requires thinking beyond the here and now. And when you are trying to anticipate for some future vision, asking the question above helps.

The recent death of a New York hedge fund investment manager is what sparks this particular observation. The 70-year-old founder of the Wainscott Capital Partners Fund was found shot to death in his Manhattan apartment on Jan. 4.

Police investigating the case have since arrested the man's 30-year-old son and charged him with murder. The suspicion is that they had been at odds over an allowance the son was receiving.

At the same time, the events have spurred observations from some estate planning experts. They say the case serves as a good reminder about the importance of planning for contingencies regarding how inheritances are handled. Here's why.

The way things stand right now, the division assets among heirs of the slain fund founder is stalled because the criminal case hasn't been resolved against the son. Under terms of the father's last will and testament, the son could be in line to inherent a share of the estimated $1.6 million at stake.

Legal observers note that there are laws on the books that are intended to prevent heirs from killing to get their funds. These so-called "slayer statutes" generally block wrongdoers from profiting from their intentional actions. But in this case, it isn't clear if the death was intentional. It might have been an accident. Under the former scenario, the son might be disinherited. Under the latter, he might still be a beneficiary.

Now, it may not be reasonable to frame estate planning under the notion that a loved one is likely to do you harm. But experts say it is reasonable to consider what might happen if an intended beneficiary becomes ineligible for an inheritance for some reason. How should assets be divided between remaining beneficiaries?

In other words, it's worth asking what if?

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