Getting Good Documents Drafted is only the Beginning of a Solid Estate Plan

Saturday, October 01, 2011 06:07
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Getting Good Documents Drafted is only the Beginning of a Solid Estate Plan

A good estate plan does not end at an artfully drafted set of documents. And it doesn’t end when all of the assets are transferred to the proper trusts. Unfortunately many estate planners are content to believe that their job is done when the ink is dry on the signature pages.

 

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The real work begins in the education of the family and the heirs as to what everything means and how it all works. Confusion and ignorance can unravel the best of estate plans and damage family relationships at the same time. When a parent dies without informing children of their roles, responsibilities and rights much can go wrong and often does. Planners can help by taking leadership and providing education guidance and understanding. It can make all of the difference in the world to a family lost in the arcane language and rules of estate planning.

 

Recently, a good friend of mine lost her father after a protracted illness. Fortunately there was good trust planning in place and what assets remained were protected from loss. However, the six heirs had no idea how to handle the many tasks and decisions left to them. It wasn’t their fault. It just wasn’t their expertise and no one had taught them. The estate wasn’t large enough to warrant a large legal bill and two of the siblings were attorneys already (litigators, but who cares).

 

Some of the mistakes they made were dangerous: renting out their dad’s condo to a friend but not purchasing a landlord’s policy; driving his car well after they should have notified the insurance company that he had passed away. Small things but still enough that could cause major liabilities and expose all of the estate assets to risk.

 

Worse yet, though, is that there was no way for the heirs to reach consensus about major matters. Half of the children wanted to sell dad’s condo and half wanted to keep it as a rental property. Half want to keep the investment portfolio, a few need the cash. Now what?

 

No advisor had taken the time to teach the family a system by which they could work through these issues. Absent that training, there is a family in disarray. At a very emotional point in life feelings are heightened and reasoning impaired and no one has the skills to fall back on which would allow them to resolve relatively simple matters.

 

We estate planners need to do better. Families need our help and they need it before they’re in the middle of the problem. Take the time to teach and train and mentor. Preventing these messes is much easier than trying to repair them after the fact.

 

 

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