March 2020

The MLO Minute: By Dennis McAndrews, Esq.

The famous basketball coach, John Wooden, used to emphasize to his players that “Failing to prepare, is preparing to fail.” The same can be said about preparing an estate plan to protect your family. The typical documents in an estate plan include a will, durable power of attorney, and an advance medical directive (living will). In some circumstances a trust to protect minors or an individual with disabilities may also be necessary, and a trust could also be required in circumstances involving second marriages and for tax planning. In this article, and in others to follow, we will explore some of the important reasons to consider revising your estate plan, and a number of these issues can often be quite time-sensitive.

First, is important to consider the “age” of your wills, as well as your own age and life circumstances. Over the years, we have seen that even persons of considerable means fail to review their estate plan on a regular, timely basis, and as a result place their families at risk in case of an unexpected death. For example, some wills going back a decade or more may possess a Credit Shelter Trust which is no longer necessary for the tax purposes under which they were originally created, but also may tie up resources unnecessarily beyond the control of a surviving spouse. Other factors which are discussed below and in our future articles also can indicate the need to update your estate plan now.

Second, it is critical to consider whether the distribution under your current will is that which you presently desire. Some examples of circumstances which render an immediate need to modify an estate plan are divorce, separation of the testator or a beneficiary of the estate (usually a child and his/her spouse),  death or disability of beneficiaries, or the loss of a close relationship of the beneficiary through distance or other circumstances.

Third, are your existing choices of executor/executrix up-to-date? In a number of circumstances, we have been asked by clients to quickly change the executors of their wills because a pending vacation caused them to realize that the executors in their present wills were either deceased or no longer desirable persons to administer the estate.

Fourth, has one child (or other beneficiary of the estate) received loans or gifts from you which are intended to be repaid upon death or reduce the amount to be received under the estate? Providing clarity about these issues can be critically important and avoid major and unnecessary family discord after the death of the testator.

Please be on the lookout for additional reasons to update your estate plan!