Estate Planning Not A One-And-Done Deal
Once an estate plan is completed, there’s no resting on one’s laurels.
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“There is a sense of accomplishment when an estate plan is executed,” according to an article this past summer in Forbes. “In fact, it’s quite common for people to sign documents and file them away for safekeeping and forget about them. The danger is that these individuals and families may believe that these matters require no further attention. Research with the wealthy, including the super rich, net worth $500 million or more, finds that most of their estate plans were at least five years old.
“An estate plan is not a time capsule to be opened and dissected at some distant point in the future,” Alan Kufeld, a partner at Flynn Family Office in New York City, told the magazine. “While most ultra-wealthy individuals have a valid estate plan in place, that fact is not necessarily reassuring. Many have not taken adequate steps to review and update these plans since the moment they were signed. Meanwhile, major life events such as marriage, the birth of a child or the launch of a business may have occurred. Advisors should consider scheduling annual check-ups with ultra-wealthy clients to ensure that plans reflect clear intent.”
The article goes on to point out that occasions, estate plans that were inadequate in the first of have no kept up with changes in the person’s life have led to costly and very public disputes between heirs.
“Tragedies seem deepest when they are avoidable,” according to Edward A. Renn, a partner in the New York firm Withers Bergman LLP. “That is almost always the case when it comes to family disputes surrounding estate planning and wealth transfers. Often, family members shy away from the planning process because of the difficult conversations it can entail. This is an opportunity for the advisor to educate clients regarding the benefits and risks of planning while helping to bridge family divides. The key is to evaluate the impact on the estate or wealth transfer plan of all major decisions and life events as elements of a broader generational family wealth strategy. This can simplify an ongoing process and limit the potential for damaging and high-profile legal disputes surrounding the disposition of family assets in the future.”
Maintaining an up-to-date estate plan is crucial for more than just the super-rich, the article states.
“It’s not just the very wealthy who are, many times, not taking the time or making the effort to revise their estate plans, it’s the norm. There are a number of reasons for this including the cost of redoing an estate plan as well as the difficult decisions that often have to be made.”
