Estate Planning, when done correctly, should address your specific needs and wishes as part of a full legacy strategy. But even if your plan is crafted perfectly when it’s signed, it still may not do what you want it to by the time you pass away. It’s not that the Estate Plan was created improperly, it’s that something else may have happened.
Too often people will have the false assumption that creating and Estate Plan will control the succession of all of their assets. But unless your financial designations and titling are consistent with your Estate Planning strategy, the plan will not be able to work fully to effectuate your wishes. Wills and Trusts only control the assets that they govern. For wills, it only controls your probate assets. For trusts, it only controls assets you re-titled into the name of the trust during your life, or assets you make pay to the trust after you’re gone (with beneficiary designations or through your will). If your will contradicts your beneficiary designations, you won’t have a consistent succession plan. If nothing is funded into or paid to your trust at death, your trust’s terms will not govern your assets after you’re gone.
If your wishes for your legacy and the succession of your wealth have changed since you signed your Estate Plan, you need to amend your plan to effectuate such changes. Too often people will sign their Estate Planning documents and never review them. By the time they pass, their family is left administering an estate in a manner you didn’t want. Your Estate Plan should be reviewed regularly and updated as needed. If not, your plan may not work the way you want it to. This goes for the financial side as well – updating beneficiary designations or restructuring as your assets change.
Death and disability are good reasons to update your Estate Planning documents. If a key person, like your executor or a named beneficiary, dies before you, your plan should be updated to accommodate that change in circumstances. Failing to update as needed can impact the success of your Estate Planning strategy.
Not all lawyers act as fiduciaries for their clients, even though they’re legally obligated to. That means sometimes a client will get sold a plan that’s too complex for their needs, just so that the lawyer makes a more substantial fee. Adding complexity to the Estate Planning process without a good strategic reason can make the process harder than it needs to be. If your plan could otherwise have been accomplished through beneficiary designations but you’re, instead, passing everything through a trust, your plan is not as streamlined and straight-forward as it could be.