MOST ESTATE PLANS DON’T WORK

You’ve heard that before—from me! If your estate plan does what you expect it to do at the time it is called upon, it’s a plan that worked.  Again, most plans don’t work. Why is that?


One of the main contributors to the truth of that statement is the lack of an ongoing maintenance program. Many estate planners don’t offer one – traditionally, none of us did; some contemporary planners do, to one extent or another. I offer a variety of maintenance programs, some extremely inexpensive and some more costly. Typically, we custom tailor the plan to meet individual clients’ needs.


A maintenance program is that part of a modern estate plan that meets this goal: “We want to meet on a regular, prearranged schedule with our planning attorney to make sure our plan is 
• up to date, 
• reflects changes in our circumstances, 
• reflects changes in planning techniques, 
• demonstrates visually that all of our assets are and remain             properly titled into the plan, and 
• as our lives and our goals move, our plan reflects those different ideas.” 


It is essential that an ongoing relationship exist and sustain between the clients and the attorney. Otherwise, the best it can offer is to be “reactive.” (Fix me, I’m broken)


That’s a mouthful. But the result of a failure to do this is an estate plan that didn’t ( or won't) work. Consider this very simple, yet frequently occurring example. Bob and Carole have a trust that is properly funded (assets are properly titled in the trust). They take a short vacation to Taos, New Mexico and fall in love with an available condo up on Taos Mountain. They buy it. They don’t have their trust book with them and the local title company is confused about how to title the new condo. So, Bob and Carole take title in their own name and remind themselves to call me when they get home.  They forget.


Years later, they get to experience a probate. Did the plan work? At the first death, a joint tenancy asset may cause unexpected surprises both in terms of estate tax obligations that would have been avoided had the condo been in the trust, and title being in held in a way that, depending on personal circumstances, could be seriously detrimental, including the possible loss of entitlement benefits.


With your own planning attorney, don’t accept his or her telling you that the only maintenance needed is for the client to remember to initiate a call to the attorney when “something comes up.” That nearly guarantees that your estate plan won’t work.