March 2, 2017. By Jennifer Wolfsberg:

Over the last several years we as a firm have become more involved in our client’s financial organization as it pertains to family office services and wealth management.  As part of this process, we actively speak with their CPAs, insurance providers, benefits specialists, and also estate attorneys.

Estate planning is a significant part of financial organization, and we work with many wonderful attorneys on behalf of our clients.  There are, however, several occasions in which a family has not spoken with their estate attorney for many years, oftentimes since their first child was born which is typically the catalyst for their first engagement. In many cases 20 years have passed, or the time elapse since welcoming their first child, and we find that their documents are no longer relevant to the family’s current needs.  Others have either never had documents drawn at all (much like 56% of Americans), or have not updated them post-divorce or after the loss of a spouse.  The thought of addressing the plan can be quite daunting, and many families have the misconception that these documents remain relevant and valid for a lifetime regardless of changes to their personal circumstances.

We have also seen many cases where the family’s estate plan has been created, yet unknowingly not implemented.  The last and most critical step in the planning process is to execute the recommendations of your estate attorney as outlined in their funding summary and overview letter.  Tasks to be addressed may include retitling of assets and/or updating any beneficiary designations.  Again, the mistake is assuming that once a plan is completed with an attorney nothing more needs to be done.  It is important to understand that there are financial and operational tasks that may still need to be acted upon after you sign your estate documents.  For example, if your estate plan calls for converting your individual account into a trust account, that does not happen automatically.  In order to retitle those assets, you must submit the appropriate forms with your financial institution, which your financial advisor can assist with.

Here are a just a few helpful reminders as you begin revisiting your estate plan:

  • Review of Existing Planning Documents – Review your current estate plan and make note of any amendments that you wish to make, such as inheritance allocations, selections for personal representative, trustees, power of attorney or health care proxy. If your plan documents are older than 5 years we highly recommend contacting your estate planning attorney to request a meeting or call to discuss possible personal changes, or updates that may be needed based on current estate and tax law.
  • Implementation of the Plan – An estate plan is only effective if it is implemented. We cannot stress this enough. We often find that many families do indeed have a trust document, however they have never provided this document to their financial advisors to correctly title and register assets (such as investment accounts), nor have they acted upon the recommendations made by their attorney to update life insurance policies and/or retirement plan beneficiaries; without these changes, the plan will not be enforced in case of an emergency, and costly probate fees or operational delays could apply.

If you should have any questions or concerns regarding your asset titling, plan implementation, or simply where to begin, please do not hesitate to call.