Monday, August 3, 2020
There are two main reasons for estate planning failures:
- The lack of a follow through and
- Heirs not being prepared for the financial transition
You should regularly update your plan. One way that clients fail to follow through us by funding a living trust. These trusts are set up to "avoid probate and ensure assets are managed in cases of disability."
Powers of attorney and advance medical directives are other areas were estate planners often see mistakes. Many clients do not tell other people about these documents; and they do no good if no one knows about them. Be sure that an agent knows about these documents.
One of the number one things that people fail to do is update their plan consistently. When your situation changes and when the law changes, this should be an alert that you may need to update your plan. Failing to do so can produce major repercussions for you and your loved ones.
The second reason for the failure of estate plans is not preparing heirs. You should inform your heirs to ensure that there is a smooth financial transition in the event of your death. If you have heirs that are not responsible or do not know how to handle money or property properly, you should take extra precautions.
You should not only inform your heirs, but also teach and educate them.
If your avoid these two mistakes, your estate plan will be far less likely to fail.
See, Bob Carlson, Most Estate Plans Fail, Don’t Let Yours Be One Of Them, Forbes, Jul 31, 2020.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.