Don't Discount the Importance of Keeping Your Estate Plan Up-To-Date!

There is a sense of accomplishment when an estate plan is executed. In fact, it’s quite common for people to sign documents and file them away for safe keeping and forget about them. The danger is that these individuals and families may believe that these matters require no further attention. Research with the wealthy – including the super-rich (net worth = $500 million or more), finds that most of their estate plans were at least five years old.

“An estate plan is not a time capsule to be opened and dissected at some distant point in the future," according recent Forbes article. The article, titled "Why You Should Update Your Estate Plan," explains that many ultra-wealthy individuals have a valid estate plan in place, but have not reviewed and updated their plans after they first signed them. In some instances, an outdated or insufficient estate plan have caused disputes between heirs. Unfortunately, many of these situations are even more tragic because they are usually avoidable, especially when professionals can facilitate difficult conversations.

The original article notes that family members will often shy away from the estate planning process because it typically means some tough discussions. Procrastination is the silent killer of your estate plan. The article also reminds us that this can be a wonderful opportunity for your estate planning attorney to educate family members on the benefits and risks of planning while helping to bridge family divides. In fact, the "key is to evaluate the impact on the estate or wealth transfer plan of all major decisions and life events as elements of a broader generational family wealth strategy." As a result, this can simplify an ongoing process and reduce the possibility of damaging legal disputes on the disposition of family assets in the future.

An estate plan should be reviewed: (i) to be sure assets are properly titled in the name of the trust; (ii) address a meaningful change in your life or family; or (iii) every few years just to make sure you are up-to-date with the changing tax laws. We provide our clients free review every three (3) years to be sure that your estate plan is up to date and effective. Contact us to learn more about estate planning.

Reference: Forbes (July 3, 2014) "Why You Should Update Your Estate Plan"

John Goralka is the lead attorney and founder of the Goralka Law Firm, P.C., and is an experienced Sacramento estate planning and tax planning lawyer. For help in Sacramento with estate planning, business planning or tax planning, please contact our office.