Bay Area Estate And Tax Planning Law Firm

How things can turn south with even a well-crafted estate plan

On Behalf of | Feb 24, 2017 | Uncategorized |

A recent article in an online California publication is quite instructive — even eye-opening — regarding the need for any estate planner to periodically revisit material points in planning documents and, if necessary, make adjustments to conform with present realities.

Because, as the following notes, here is what might happen if you don’t.

The story related by one individual to a financial planner/columnist can be quickly told.

It goes like this.

Mom and dad executed a living trust, along with relevant documents listing asset information. The trust listed them as trustees, with the surviving spouse to continue in that role following the other’s death. When that latter event occurred, the trust provided that all the assets would be equally divided among three children.

Dad died. Then two of the children divorced and remarried. A stepchild was brought into the family. Then two of the children died.

And then mom developed dementia and passed away.

In reviewing the trust, the surviving child found a legal instrument that was so anachronistic as to be irrelevant and light years from effecting an outcome that she knew her parents would have wanted. Moreover, only copies — not originals — of important documents could be located.

“[T]he estate plan put together by my parents,” she notes, “was sorely out of touch with the reality of our current family dynamics.”

The bottom line was that various loved ones were “disinherited by an out-of-date estate plan.”

Fortunately, things worked out because, as noted in the above media piece, “the heirs were agreeable about things.”

Candidly, that is not often the case, with a long-ago executed estate plan that was never revisited during years of subsequent family readjustments far more often ushering in conflict that is not easily — if ever — resolved.

The parents’ daughter says that the experience with the trust taught her some important lessons.

Central among them, she notes, is the importance of working with a proven estate planning attorney. That professional can ensure that things are properly done in the first instance and that planning documents continue to remain viable over time.