Will Your Estate Plan Work When Your Family Needs It?
Estate Planning: Beyond a One-Time Task
Many people view estate planning as just another item to check off their life's endless "to-do" list. You might think you can hire a lawyer to draft the necessary documents or even use online templates to create a DIY plan. After that, you might tuck those documents away, mentally check off "estate planning," and forget about them.
However, estate planning is not a one-and-done task. Its effectiveness hinges on regular updates as your assets, family circumstances, and laws evolve. Failing to keep your plan current can cause significant issues, potentially leaving your family worse off than if you had never created a plan in the first place.
The Importance of Keeping Your Plan Updated
Consider this story to understand the potential consequences of not updating your estate plan:
A Game-Changing Realization
Ali, while in law school, experienced a family crisis when her father-in-law passed away. He had paid a Florida law firm approximately $3,000 to prepare an estate plan, aiming to spare his family from the hassle and expense of probate court and conflicts with his ex-wife. Unfortunately, despite his efforts, his family ended up dealing with exactly those issues.
They had to go to court to claim assets that should have passed directly to them. Additionally, they had to contend with his ex-wife and her attorneys. Ali was baffled—why were her father-in-law's loved ones facing these problems despite his investment in estate planning?
The issue was that his planning documents were outdated, and his assets were not properly titled. Although he created a trust intended to bypass probate, many of his assets were never transferred into the trust's name. Without an updated inventory of his assets, the family couldn't confirm everything he owned at his death. To this day, one of his accounts remains stuck in the Florida Department of Unclaimed Property.
Ali initially suspected malpractice. However, after working at a top law firm and consulting other leading estate-planning attorneys, she discovered that what happened to her father-in-law was common practice, not malpractice. This realization motivated Ali to change how estate planning is done.
Ensuring Your Plan Works When Needed
Stories like Ali’s are not uncommon. One of the most frequent issues encountered is when loved ones of someone who has become incapacitated or died discover that the existing plan no longer works. By then, it’s often too late, leaving the family to deal with the fallout.
To avoid such scenarios, it’s essential to review your estate plan annually and update it immediately following significant life events like divorces, deaths, births, and inheritances. Regular updates ensure your plan remains effective and aligned with your current situation.
Because your estate plan is designed to protect and provide for your loved ones in case of your death or incapacity, it's crucial to involve your family in the planning process. Keeping them informed about your latest planning strategies and the reasons behind your choices fosters understanding and preparedness.
Systems to Keep Your Plan Current
Our approach to estate planning is designed to make the process as streamlined and worry-free as possible. Unlike the lawyers who worked with Ali’s father-in-law, we ensure that your legal documents stay updated and function as intended.
We focus on two key areas that often lead to problems: maintaining an updated inventory of assets and correctly titling assets held by a trust.
Asset Inventory
Keeping a regularly updated inventory of all your assets is crucial. We assist in creating a comprehensive list of your assets and ensure it remains updated throughout your lifetime. This inventory helps your loved ones know what you own, where it is, and how to access it if something happens to you.
Trust Funding
Properly titling assets held by a trust is essential. It’s not enough to list the assets in the trust; you must transfer the legal title of specific assets—such as real estate, bank accounts, securities, and brokerage accounts—to the trust. This process, known as “funding” the trust, ensures that the assets are appropriately disbursed.
We don’t just create a trust for you; we also ensure your assets are correctly titled when the trust is established and that any new assets acquired during your life are properly funded into the trust. This prevents your assets from being lost and keeps your family out of court due to an incomplete plan.
For the Love of Your Family
Our services go beyond creating documents and parting ways. We aim to build a lasting relationship with your family, ensuring your plan remains effective and up-to-date throughout your lifetime and beyond. Our goal is to keep your family out of court and conflict in the event of your death or incapacity. Contact us today to start planning for your family’s future.
This article is a service of Zarda Law, S.C. We do not just draft documents; we ensure you make informed decisions about life and death, for yourself and the people you love. That's why we offer Legacy Planning Session, during which you will get financially organized and make all the best choices for the people you love. You can begin by scheduling a Legacy Planning Session and mention this article to find out how to get this $750 session at no charge.
