This is the fourth and last post in a series of NLBM articles discussing the true costs and consequences of failed estate planning. The series highlights a few of the most common—and costly—planning mistakes we encounter with clients.
Many people view estate planning as a chore to be checked off after begrudgingly completing it. 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 with that is that estate planning is not a one-and-done type of deal. If it’s not regularly updated when your assets, family situation, and/or the laws change, your plan will be totally worthless when your family needs it. In fact, failing to regularly update your plan can create its own unique 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, Alexis Neely. In truth, 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.
The father-in-law story
When Alexis was in law school, her father-in-law died. He had a Florida law firm do his estate planning for about $3,000 so that his family wouldn’t have to go through the trials of probate or drawn into court battles with his ex-wife. Sadly, after his death, that’s exactly what happened. His family was forced to go to court in order to claim assets that were supposed to pass directly to them, and they had to deal with his ex-wife and her attorneys in the process.
Alexis 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.
Alexis’ father-in-law had not transferred some of his assets into the name of his trust 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.
Such an oversight made Alexis think that this was surely malpractice, but after working for one of the best law firms in the country and interviewing other top estate-planning lawyers across the country, she confirmed what happened to her father-in-law wasn’t malpractice at all. Rather, it was common practice.
After everything she had learned and experienced, when Alexis started her own law firm, she did so determined to ensure that her clients would always have a plan that worked effectively and properly when their loved ones need it to. She created the New Law Business Model to do exactly that.
Keep your plan up to date
Other than not having an Will and Trust at all, the most common mistake we come across is people not updating their plans. When we get called by the loved ones of someone who has become incapacitated or died with a plan that no longer works because it has not been properly updated, there is, unfortunately, nothing we can do. Once something happens to you, it’s too late to adjust your plan, and the loved ones you leave 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. We have built-in systems and processes to ensure your plan is regularly reviewed and updated, so you don’t need to worry about whether you’ve overlooked anything important as your life changes, the law changes, and your assets change.
You should also create and regularly update an inventory of all your assets, including digital assets like cryptocurrency, photos, videos, and social media accounts. This way, your family will know what you have and how to find it when something happens to you and nothing you’ve worked so hard for will be lost to our state’s Department of Unclaimed Property.
You can get started on your Personal Resource Map using this free website that we created because making an inventory is that critical for your family. Don’t wait- act now while you can.
Properly title your trust assets
When you create a trust, 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. Otherwise, the trust cannot work properly and your family will have to go through probate.
While most lawyers will create a trust for you, few will ensure your assets are properly funded. We’ll not only make sure your assets are properly titled when you initially create your trust, we’ll also ensure that any new assets you acquire over the course of your life are inventoried and properly funded to your trust.
Keep your family out of court and conflict
As your Personal Family Lawyer®, we’ll support you in not only creating a plan that keeps you family out of court and conflict in the event of your death or incapacity, but we’ll ensure your plan is regularly updated and funded to make certain that it works and is there for your family when you cannot be. Contact us today to get started with a Family Wealth Planning Session.
This article is a service of Levi Alexander, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered 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 will get more financially organized than you’ve ever been before and make all the best 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.