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7 Ways Estate Plans Fail

By William Peacock ‚Äč

Failing to plan is planning to fail. But just having an Estate Plan isn't enough.

Estate plans have to be regularly updated to account for major changes, such as marriage or divorce, the birth of a child, acquisition or divestiture of property, or changes to the law itself.

Here are some reasons that we've seen Estate Plans fail (and helped clients to recover from those failed plans):

1. NO HEALTHCARE PLAN

Do you have religious beliefs with regards to health care? Have you made a legally enforceable plan, or will you be at the mercy of others? Is there one person in your family that you would trust more than the others to make such decisions? (And if that person isn't available, is there a second person?)

2. IGNORING FAMILY DYNAMICS

No matter how “Leave it to Beaver/Brady Bunch” your family is, Trust Administration tends to bring out the worst in family dynamics, especially where multiple people share authority (sibling co-trustees).

3. NO PET PLAN

Pets are often closer to us than most of our family, yet many fail to plan for them. What will happen to them when you are not around? Did you even know that a pet trust is an option?

4. NEW OR VACATION HOMES

If you fail to properly fund, update, and maintain your trust, you will end up in probate, which defeats one of the primary reasons for creating a trust in the first place. Major financial transactions, such as purchasing real estate, necessitate a revision.

5. MISSED CHANGED LAW

Tax and probate laws change. If your plan is out of date it could cost you dearly in taxes or require your family to deal with costly probate proceedings.

6. MISSED LIFE CYCLE EVENTS

Marriage, Birth, Death, Divorce. Your trust is a living document. It is meant to grow with you. To most effectively carry out your wishes, it must be current.

7. OUT-OF-DATE ACCOUNTS

Even if you update your trust, you may still need to update your external financial accounts to account for changes in beneficiaries due to life cycle events. Where should proceeds from your life insurance, retirement, and other accounts go?

If you have an existing estate plan, whether we drafted it or not, bring it by and our Corona estate planning attorney will review it to ensure that it meets your needs and complies with current laws.

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