If you’re like most people, you likely think estate planning is just one more task to check off of your life’s endless “to-do” list.
You may shop around and find a lawyer to create planning documents for you, or you might try creating 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 not a one-and-done type of deal.
In fact, if it’s not regularly updated when your assets, family situation, and the laws change, your plan will be worthless. What’s more, failing to update your plan can create its own set of problems that can leave your family worse off than if you’d never created a plan at all.
The following true story illustrates the consequences of not updating your plan, and it happened to the founder and CEO of New Law Business Model, Ali Katz. Indeed, this experience was one of the leading catalysts for her to create the new, family-centered model of estate planning we use with all of our clients.
A game-changing realization
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 $3000 to prepare an estate plan for him, so his family wouldn’t be stuck dealing 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 did happen. His family was forced to go to court in order 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 in the process.
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? It turned out that not only had his planning documents not been updated, but his assets were not even properly titled.
Ali’s father-in-law created a trust, so that when he died, his assets would pass directly to his family, and they wouldn’t have to endure probate. But some of his assets had never been transferred into the name of his trust from the beginning. 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.
Ali thought for sure this must be malpractice. But after working for a law firm and interviewing other estate-planning lawyers across the country, she confirmed what happened to her father-in-law wasn’t malpractice at all. In fact, it was common practice.
This inspired Ali to take action. When she started her own law firm, she did so with the intention and commitment that she would support ongoing review and funding intended to help clients’ plans address their families’ needs and create a service model built around that mission.
Will your plan work when your family needs it?
We hear similar stories from our clients all the time. In fact, outside of not creating any plan at all, one of the most 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 the loved ones left behind are forced to deal with the aftermath.
We recommend you review your plan annually to make sure it’s up to date, and immediately amend your plan following events like divorce, deaths, births, and inheritances. This is so important, we’ve created proprietary systems designed to support regular reviews 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 what your latest planning strategies are and why you made the choices you did.
Unfortunately, many estate planning firms do not engage with the whole family when creating estate plans, leaving the spouse and other loved ones largely out of the loop. We believe the planning process works best when all of your loved ones are educated and engaged. We can even facilitate regular family meetings to keep everyone up-to-date.
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 both you and your family. We can help create legal documents and discuss review options as your circumstances change.
For example, our systems and processes are intended to address two risks illustrated by her father-in-law’s plan. These mistakes include: 1) not keeping his assets properly inventoried, and 2) not properly titling assets held by his trust.
As to properly titling assets held by a trust, when you create a trust, it’s not enough to list the assets you want it to cover. You have to transfer the legal title of certain assets—real estate, bank accounts, securities, brokerage accounts—to the trust, known as “funding” the trust, in order for them to be disbursed properly.
Trust funding is an important part of planning. We can help review your asset inventory, titling, and funding when you create a trust and acquire new assets. Keeping that information current may reduce the risk of overlooked assets or probate involving assets not properly transferred into the trust.
For the love of your family
With us as your Personal Family Lawyer®, our planning services go far beyond simply creating documents and then never seeing you again. In fact, 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 can help create and review a plan intended to reduce the likelihood of court involvement and conflict in the event of death or incapacity. Contact us today to get started.
This article is a service of AMO LAW, a Personal Family Lawyer®. We don’t just draft documents; we help you make informed decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you can become more financially organized and consider planning choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.