Estate Planning Problems
Proper Estate Planning allows you to plan for yourself and your loved ones without giving up control of your affairs. Your estate plan should address what happens in the event of your disability. It should give what you have to whom you want, when you want and the way you want. When you plan your estate you should be fully informed of all costs, and those costs should be controlled.
ONE PROBLEM WITH TRADITIONAL ESTATE PLANNING: UPSIDE DOWN PLANNING!
The first problem is that most estate plans are upside down. Huh? What do we mean by that?
We view the creation of an estate plan much like building a pyramid. The Planning Pyramid has you, with your goals, needs, dreams and aspirations as its base. Most people want to be sure that they (and their spouse, if married) are taken care of now and throughout their retirement. Taking care of YOU is the highest priority, and sorting out your objectives for life and your family are the foundation of the plan.
The next building block in the Planning Pyramid is your Family. In order to plan, we must have a thorough understanding of your family members and family dynamics – the people you care most about and who will someday receive the benefits of your success. This may be your own descendants or extended family; it may involve friends and community. You, not your attorney, are the expert on your family. We depend on you to teach us about you and your family. We’ll then endeavor to teach you about the law.
After the foundation of the Planning Pyramid is laid – you first, your family second – then it is appropriate to discuss your Property. We find that most clients want to preserve and protect their accumulated assets and that they are often interested in Expanding their wealth. Teamwork among professionals (attorneys and financial advisors) is necessary to fully address these two areas.
Finally, and we do mean the final piece in the Planning Pyramid puzzle, sort of like the tip of the iceberg, we can address strategies and tools to save Taxes and minimize costs of the overall planning process. Usually these are the easiest pieces to fit into your overall estate plan.
Now, when we say most estate plans are upside down, we mean that they are built almost solely on tax planning strategies instead of on family planning! Most traditional estate plans we review do not reflect the family values or the client’s personal goals and objectives. We believe the family plan should be the very foundation of the plan, with everything else built on top of that.
SECOND PROBLEM: MOST ESTATE PLANS JUST DON’T WORK!
The second problem we routinely observe in estate planning as traditionally done is this: most plans fail to meet all of the expectations the client had in mind when he or she began planning.
Why don’t most plans meet the client’s expectations? We believe it is because many clients and professionals view estate planning as transactional. They say “I did my estate plan.” In reality, estate planning is an ongoing process, not a transaction. Your estate plan must be adaptable and you must have a systematic process to keep it up-to-date in order to make sure that it will work as expected.
Such a process is not commonly seen in our industry. People don’t like to see their attorney because of fees, and they don’t trust an attorney who writes to tell them their estate plan “should be reviewed” – traditionally this has meant you would have to “do your estate planning” over again, and be charged a fee similar to when you originally “did your estate plan.” Most clients seem to see it as another transaction, instead of as an ongoing process; many professionals view it that way too. So the plans fall out of date, and are generally out-dated when they are called upon to work (at death).
Don’t stop here. You CAN assure that your plan will work.