Clients’ Failure to Keep Estate Plans Current Can Sabotage the Entire Estate Plan

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Holland & Hart - Fiduciary Law Blog

Estate planners work hard to set up estate and wealth transfer plans that fit a client’s needs and ensure that everything works together for the client.  Unfortunately, as the client’s situation changes, they often don’t inform the estate planning attorney so appropriate changes can be made to the estate planning documents.

Common examples are divorce, having additional children, or even a changing relationship with a child or children who may be named as successor trustee.  A child could also encounter difficulties in his or her life that change the way the parent may want the assets to go to the child.  A change in a child’s life could also change the suitability of that child to act as an agent or a trustee in the parent’s estate plan.

A perhaps more often forgotten concern is updating beneficiary designations on things like life insurance and retirement plans.  Sometimes clients appear to think that their will or trust will direct what happens at their death even with assets governed by beneficiary designations.  It is amazing how often we see an ex-spouse still listed as the beneficiary of a substantial life insurance policy at a client’s death, even after the client has remarried.  As much as estate planners discuss these issues with their clients when they draft the estate plan, it is pretty typical for the client to forget those warnings.

The estate planner is limited in what he or she can do other than advising and reminding the client to review their estate plan regularly, including beneficiary designations.  Perhaps sharing examples of bad results from lack of attention to updating their estate plan will help the client remember to consult with the attorney when things change.  Most attorneys don’t have the ability to contact all their clients every couple of years to remind them about updating their estate plan.  Therefore, the client should own the responsibility to contact their estate planning attorney regularly, and especially when there are changed circumstances in their life or the lives of any of their beneficiaries.  We as estate planning attorneys should make that point very clear when meeting with clients in addition to putting it in writing, in the hope that we can help clients avoid sabotaging their estate plans by their own neglect.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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