You can shop around and find a lawyer to create planning documents for you or create your own DIY plan using online documents. Then, you’ll put those documents into a drawer, mentally check estate planning off your to-do list, and forget about them.
The problem is – estate planning is more than just a one-and-done task on your to-do list. Your estate plan needs to grow and evolve along with your wealth, family and life circumstances.
The investment of your time, effort, and money to create an estate plan will inevitably be worthless, if your plan is not regularly updated to account for your assets, family situation, and changes in the law / tax code. In fact, failing to update your plan can create problems that can leave your family worse off than if you’ve never created a plan.
The following story of a lawyer’s experience in her own family illustrates the consequences of not updating your plan:
A Game Changing Realization
Over 20 years ago when Ali was in law school, her father-in-law died. He’d done his estate planning—or at least thought he had. He paid a Florida law firm roughly $3,000 to prepare an estate plan for him, so his family wouldn’t be stuck with the hassles and expense of probate court or drawn into needless conflict with his ex-wife.
And yet, after his death, that’s exactly what happened. His family was forced to go to court to claim assets that were supposed to pass directly to them. And on top of that, they had to deal with his ex-wife and her attorneys.
Ali couldn’t understand it. If her father-in-law paid $3,000 for an estate plan, why were his loved ones dealing with the court and his ex-wife? His planning documents were not updated, and his assets were not even correctly titled.
Ali’s father-in-law created a Trust so that his assets would pass directly to his family when he died, and they wouldn’t have to endure probate. But some of his assets had never been transferred into the name of his Trust after creating his plan. And since there was no updated inventory of his assets, there was no way for his family to even confirm everything he had when he died. To this day, one of his accounts is still stuck in the Florida Department of Unclaimed Property.
As a law student, Ali thought for sure this must be malpractice. But after getting out of school, getting a job with one of the best law firms in the country and interviewing other top estate-planning lawyers across the country, she confirmed what happened to her father-in-law wasn’t malpractice at all. It was common practice and the industry standard.
This all-too-common occurrence is what inspired the game changing realization that we, as attorneys, need to change the way we approach estate planning. I realized that it was my responsibility as the “expert” and guide to our clients, to ensure we created the systems and processes to adequately educate our clients, help them “understand” their decisions and how to properly implement their plan. In order to do so, it was clear we needed to spend more time meeting and following up with our clients, in order to encourage and facilitate an ongoing life-long relationship with them.
Will Your Plan Work When Your Family Needs It?
We hear stories similar to Ali’s from our clients all the time. In fact, outside of not having any documents in place, one of the most frustrating and common planning mistakes we encounter is when we get called by the loved ones of someone who has become incapacitated or died with a plan that no longer works. Yet by that point, it’s too late, and their loved ones are forced to deal with the aftermath.
We recommend you review your plan annually to ensure it’s up to date and immediately amend it following events like marriage, birth of a child, death or divorce in the family, or receipt of inheritance. This is so important we’ve created proprietary systems designed to ensure these updates are made for our clients. You don’t need to worry about whether you’ve overlooked anything as your family, the law, and your assets change over time.
Furthermore, because your plan is designed to protect and provide for your loved ones in the event of your death or incapacity, we aren’t just here to serve you—we’re here to serve your entire family. We take the time to get to know your family members and include them in the planning process, so everyone affected by your plan is well-aware of your latest planning strategies and why you made the choices you did.
Unfortunately, many estate planning firms treat estate planning like a one-time transaction. They don’t follow-up with their client or have the systems in place to establish an ongoing relationship with them. Further, they only engage with their “client,” leaving the spouse, children and other loved ones out of the loop. The planning process works best when you and your loved ones are educated and engaged in the implementation of your estate plan throughout your life. That’s why, when it’s appropriate, we prefer to facilitate regular family meetings to keep everyone up-to-date and aware of their role and responsibilities to ensure your plan will work effectively when your family needs it most.
Built-In Systems To Keep Your Plan Current
Our legal services are designed to make estate planning as streamlined and worry-free as possible for you and your family. Unlike the lawyers who worked with Ali’s father-in-law, we don’t just create legal documents and put the onus on you to ensure they stay updated and function as intended — we take care of that on our end by implementing systems to educate and empower our clients to stay-on track and keep their plan updated throughout their life.
For example, our built-in systems and processes would’ve prevented two of the biggest mistakes made by the lawyers who created her father-in-law’s plan. These mistakes include: 1) not keeping his assets properly inventoried and 2) not correctly titling assets held by his Trust.
First, maintaining a regularly updated inventory of all your assets is one of the most vital parts of keeping your plan current. To accomplish this, we’ll not only create a comprehensive asset inventory, we will also help you to make sure the list stays consistently updated throughout your lifetime.
To start, anyone who is reading these words should first create an inventory of all your accounts and assets to ensure your loved ones know what you have, where it is, and how to access it if something happens to you. From there, when you’re ready – meet with our office, so that we can incorporate your inventory into our systems, help you to design and create a comprehensive estate plan and implement our process / strategies to ensure you to keep your plan up to date throughout your life.
The second mistake we see most people make when they have a Trust is that they never transfer their assets to the Trust after it’s created. It’s important for you to understand that after you’ve created a plan, you’ll need to properly title all your assets that you want to be owned by your Trust. It’s not enough to simply list your assets in the Trust when you create it, you’ll need to transfer the legal title of certain assets — real estate, bank accounts, securities, brokerage accounts — to the Trust. Estate planning attorneys refer to this process as “funding” the Trust. You have to accomplish these transfers so that your assets are properly owned, if you want your estate plan to be properly implemented and your assets appropriately disbursed when something happens to you.
While most lawyers will create a Trust for you, only some will ensure your assets are properly funded. We’ll not only schedule a follow-up meeting with you to make sure your assets are properly titled after creating your Trust, we’ll also ensure that any new assets you acquire throughout your life are inventoried and properly funded to your Trust. This will keep your assets from being lost and prevent your family from being inadvertently forced into court because your plan was never fully completed.
For The Love Of Your Family
With us as your Personal Family, Wealth & Legacy Lawyer™, our services and planning process go far beyond simply creating documents and then never seeing you again. We’ll develop a relationship with your family that lasts not only for your lifetime, but for the lifetime of your children and their children if that’s your wish.
We’ll support you in not only creating a plan that keeps your family out of court and out of conflict in the event of your death or incapacity, but we’ll also ensure your plan is regularly updated to make sure that it works and is there for your family when you cannot be. Contact us today to get started.
This article is a service of Family Wealth & Legacy Legal Solutions (FWLLS). We do not just draft documents; we ensure you make educated, informed and empowered decisions for yourself and the people you love. That’s why we offer a Family Wealth & Legacy Strategy Session™, during which you will get educated and begin to prepare to avoid life’s most common legal problems and get a plan in place to make the best possible choices for the people you love. You can begin by calling our office today to schedule a Family Wealth & Legacy Strategy Session and mention this article to find out how to get this $750 session at a significantly discounted rate, or even for free.