Most estate plans dont work; its absolutely true (and shocking.) Most estate plans dont work for two reasons. First, assets arent owned properly and second, estate plans arent updated.
Proper Asset Ownership
Assets must be aligned with your estate plan.
For example, if you want your trust to control assets, avoid probate, provide asset protection, and outline instructions for when you are disabled or die, the trust must own the assets. Otherwise, the trust has no control over your assets and your estate plan will fail.
A second example would be using your will to dispose of assets at your death. If you want your will to control assets and get them to certain people, you must own your assets in your individual name.
Assets in the name of your trust, owned jointly (with survivorship), or which have a beneficiary designation (i.e. life insurance and retirement accounts) are NOT controlled by your will.
This means that if you include provisions in your will to give $50,000 to each child, but own everything jointly with your spouse, your children will get nothing and your estate plan fails.
Updating Your Estate Plan
Estate plans need to be updated every three to five years.even sooner, if you experience a significant life change such as a new child or spouse.
All estate plans experience three types of changes:
- Changes in the law
- Changes in your personal situation (finances, goals, family, and situation)
- Changes in your estate planning attorneys planning methods
If you have a qualified estate planning attorney, he or she will be constantly striving to implement new techniques to make your estate plan more effective.
If you want your estate plan to work, make sure you own all of your assets properly and update your estate plan. Otherwise, your plan will, likely, fail.