Understanding Your Estate Plan

If you’re a bit uncertain about exactly what estate planning entails or how important it is for you, you’re in good company. 74% of respondents to a 2016 WealthCounsel survey said they found estate planning confusing. Fortunately, that confusion leads many people who create estate plans to get professional help. 76% of respondents to the same survey said they thought an attorney was essential to creating an estate plan. And, among respondents who had an estate plan in place, 42% had turned first to an attorney for guidance.

Posted on May 10, 2018

That’s encouraging news, but it’s only the first step. Making the most of your estate plan and the professional assistance you receive in creating it requires a thorough understanding of the plan.

Know and Implement Your Estate Plan

Of course, an experienced estate planning attorney will review your goals, explain your options, and draft documents according to your wishes. But, too often, estate planning clients are content to provide information to the attorney and then tune out, assuming that they don’t have to concern themselves with the details.

An effective estate plan isn’t a set of documents that you have drafted and then put in your safe for the day you become incapacitated or pass away. Estate plans require implementation and maintenance, and if you don’t understand the plan you’ve put in place, you may not get full value from your investment.

For example:

• When you appoint a healthcare proxy or grant a financial power of attorney to a relative, it is important that you make sure that person is aware of and agrees to the appointment, understands the scope of his or her authority and responsibility, and either has a copy of the documents or knows how to access them quickly.
• When you create a living trust to hold and pass assets, you’ll have to transfer assets into that trust. In some cases, this is as simple as filling out a form at your bank, but in others you’ll have to transfer titles. Failure to properly transfer property will leave it outside the trust, likely forcing your beneficiaries to go through probate to manage the stray property that didn’t make it into the trust.
• Certain events, such as the death of a beneficiary, divorce, or the birth or adoption of a child, will trigger the need to review and possibly update your estate planning documents. It’s essential that you understand the circumstances under which updates may be required, and how neglecting to make changes could impact the distribution of your assets, the management of your medical care, or other essential issues.

In short, fully protecting yourself with a comprehensive estate plan requires not just obtaining advice from and putting the drafting of your documents in the hands of a qualified estate planning attorney. It also requires that you pay close attention when the attorney explains your will or living trust, the scope of your advance directive and powers of attorney, and other key concepts. The subject matter can be confusing, but it’s important. Take the time to ask questions and review with your attorney if you’re uncertain.

Your lawyer will likely explain the sorts of events that would trigger a need for review and revision of your estate plan. But, if your attorney doesn’t volunteer this information or it isn’t clear to you, take the initiative to ask questions and clarify. Once you leave the office with your estate planning documents, it’s up to you to follow the plan you and your attorney devised, and to watch out for changes that might require action.

When in Doubt, Ask Your Estate Planning Attorney

If you’re not sure whether action is required, just pick up the phone. In most cases, an experienced estate planning attorney will be able to quickly assess whether a review is in order.

Working with an experienced attorney to create an effective estate plan is a great first step toward protecting yourself and your family. Once you’ve made that investment, be sure to protect it by following through.