An estimated 70% of estates result in a loss of hard-earned assets or family disharmony and fallouts. This can easily be avoided most of the time with both a properly built and maintained estate plan.
Most people think that having an estate plan in place is something you do when you get older and that getting ahead of things by getting an estate plan while you are younger means that you're done. That's it. However, having been in this business for over 30 years now, I cannot even begin to tell you about the number of times we have seen people come in with estate plans that were drafted 10, 15, and 20+ years ago. We have been in the difficult position where someone passed away and the family is trying to administer an older, out-of-date trust and, sadly, has had to endure the nightmarish outcome of the outdated estate plan.
Thankfully, we have also been in the position of updating those trusts to the needs and the circumstances of our clients and their loved ones. They have been able to maintain an up-to-date estate plan and avoid disastrous results for their family.
HOW DO YOU KNOW IF YOUR PLAN IS OUT-OF-DATE?
Unfortunately, there is no perfect guideline for figuring out whether an estate plan is out-of-date. The fact is, most estate plans (whether Will-based or Trust-based) are revocable, which means that they are legal standby vehicles waiting to be implemented when the time comes. Whether it is when you become ill or disabled or when you pass away. What this means is that an estate plan that you had drafted many years ago may also not be an adequate reflection of your wishes or the best ways to manage your estate when it will actually be needed.
For example, let's say you had an estate plan drafted several years ago while your children were minors. Perhaps you named guardians for them and put other grown individuals in charge to take over if something happened to you. Fast forward to today. Now your children are grown up, perhaps have children of their own. Maybe the individuals you named to be in charge are no longer living or capable of stepping in to help you. Perhaps you did not name enough living successors to take over things if needed. You've sold the home you raised your kids in and have purchased and moved into a new home. Will your estate plan work well in this circumstance? Probably not. You likely would need to go through Probate Court for a conservatorship to put someone in charge if you became disabled and someone needed to step in to help you. Your estate may likely go through a Probate since there's a likelihood that your new home is not properly titled into your Living Trust.
We see these kinds of things happen all of the time. It is the equivalent of buying a car and then keeping it in the garage and then assuming that it's going to run right and have all of the necessary safety mechanisms and capabilities decades later when you take it for a spin.
A qualified attorney with experience and expertise in estate planning can review your estate plan and determine whether it is outdated and recommend any updates, including possibly an upgrade from a Will to a Living Trust or an entire amendment and restatement to your existing Living Trust.
Below is a quick checklist that may help determine whether it's time to review and update your estate plan.
c Some of the people you've named to handle your health discussions or financial matters, when you're disabled or gone, have demonstrated they're not as responsible as you originally thought—or your relationship with them has changed. (Remember, all you own may be turned into a big pile of cash and placed right into their hands!)
c You want to protect yourself and your spouse from the potentially devastating costs of long-term nursing care. (Your beneficiaries may be capable of handling money, but others may try to grab it away from them.)
c You are concerned about protecting your beneficiaries' inheritance from their spouses, divorces, lawsuits and creditors. (Your Trust and other documents may not have the newest provisions necessary to qualify you for Medi-Cal nursing care benefits. Or you may need additional planning)
c Any of your beneficiaries is now on SSI or Medi-Cal, or has proven he or she cannot properly handle his or her financial affairs. (These beneficiaries may require special provisions in your Trust or existing provisions may need to be updated.)
c You want to avoid your assets and personal affairs from winding up in Court, causing you and your loved ones considerable expense, delays and publicity when you become disabled or pass—and you want the right people to inherit. (Even if your Trust is fine as is, your asset titles should all be in your Trust name. Your beneficiary designations, such as for bank accounts, annuities, life insurance policies, retirement plans and IRAs also may need to be checked.)
c You are married and want to keep things simple for your surviving spouse. (Trusts done years ago contained many complex provisions designed to reduce Estate Taxes, which are no longer necessary due to recent tax law changes.)
c You are recently divorced, remarried or widowed. (Changes may need to be made in your plan or certain actions taken to properly implement your existing plan.)
c Your plan is over 5 years old. (Some important health care related documents may have now expired and your needs, relationships and circumstances may have changed.)
If you've checked off even one item, you should seriously consider having your estate plan reviewed to see if there are any recommended updates needed.
TAKE ADVANTAGE OF A FREE ESTATE PLAN REVIEW MEETING
The law firm of Thompson | Von Tungeln offers all of its clients a free plan review every three years. This helps to ensure an estate plan that actually works!
Whether you're a current client of Thompson | Von Tungeln or you have an estate plan drafted by another attorney, take advantage of a free estate plan review meeting with one of our attorneys by contacting our office at 661-945-5868 or attending one of our upcoming free estate planning seminars. There is no charge for this meeting and, should we recommend any updates or changes that make sense for you, we will quote you a fee for those changes at that time it is entirely up to you whether or not you wish to proceed.