Help Your Clients Avoid a Derailed Estate Plan
November 30, 2018
ATG Trust Company reviews all new relationships when called to serve as trustee or executor. While conducting our review, we often discover that a carefully crafted plan does not work as originally intended.
Without good follow through from all parties, thoughtful estate plans can go awry. If your client does not properly fund or never updates the trust as their circumstances change, your carefully drafted document may not be viable when the trustee is called upon to act.
As a trusted advisor, attorneys only have a certain amount of control over what happens when clients leave their office. However, there are some mistakes you can help your clients avoid. Here are some common missteps we routinely encounter:
- The trust is funded with real estate since the attorney prepares the deed but the rest of the assets remain in individual names.
- The trust is funded with almost all the assets except the IRA which is the major asset.
- The grantor forgets to change the beneficiary designation on an asset.
- The grantor buys property after the trust is created and forgets to have it titled in the name of the trust.
- The grantor sells a house that is titled in the trust but puts the proceeds in a bank account titled jointly with a relative.
- The grantor has a special needs grandchild that was not born when the trust was created and the trust doesn't have special needs language.
Once a derailed estate plan makes it to our trust officer's desk, it is oftentimes too late for the grantor to make necessary changes to ensure trust assets don't end up in probate, in the hands of unintended beneficiaries, or disqualifying special needs beneficiaries from government benefits. As a part of your practice, you might gently (or not so gently) remind clients to follow through on funding or examine family and financial situations to make sure that they haven't materially changed since the trust was first drafted.
After you and your client collaborate to create the perfect estate plan, you can continue to add value to your clients even after drafting. In fact, this can be the most important part of your estate planning process. Encouraging your clients to revisit their estate plan every couple of years and provide evidence that their assets have been properly retitled can help ensure that their estate plan actually fulfills the client's main objectives.
If you have questions about an estate plan, contact Kathryn Van Eeuwen today.