Make Your Estate Plan Bulletproof

If done properly, an estate plan is supposed to give you peace of mind. You know… that SWAN feeling (Sleeping Well At Night). There’s no perfect plan, but if you invest the time, have realistic expectations, and face the realities of your particular family situation, you can build a plan that is rock solid. As I always say, it’s important to review your plan on a regular basis—every three to five years makes sense for most families, but this can vary based on your individual needs.

I often get asked about how to avoid estate challenges and will contests. I’ve laid out a few ideas below. Most people do not need to be overly concerned about a will challenge. Having said that, you never know what could happen, so always hope for the best but plan for the worst.

Consider a Living Trust: If you have legitimate concerns about an estate challenge, a Revocable Living Trust is a good start to defensive estate planning. By creating a valid, fully funded trust, you remove substantially all of your estate from any probate proceedings. That’s important because a will under probate is public and therefore easier to challenge. A trust doesn’t go through the probate process, so it remains private. A trust is not impenetrable, but it’s a good deterrence for frivolous challenges.

Gift While Living: This may work for part of your estate, and in particular, personal property and valuables that you know family members may fight over. If you expect a fight among family members, perhaps just give things away now to who you want while you’re still here. This is a personal decision, as most people don’t want to part ways with their stuff while they’re still living. But if you do, the gift is no longer part of your estate and therefore not subject to challenge.

Don’t Neglect Accounts with Beneficiaries: Accounts with beneficiaries are often a large part of an estate, but most of us give little thought to who we wrote down as beneficiaries years ago. We think we have the beneficiaries we want, but sometimes, the beneficiary designations are wrong, incomplete, or blank. Also, primary beneficiaries are important, but contingent beneficiaries are just as important. Eliminate a huge potential problem by periodically reviewing your beneficiary designations. Better yet, keep one updated list of all accounts and who the primary and contingent beneficiaries are for each.

Communication 101: Communication is something so fundamental that we often overlook it. But talking to your family about your intentions with your estate & assets is key to solid estate planning. You don’t need to tell your kids or family your net worth, but let them know what your expectations are, who will be administering the estate, and anything else that you feel is important. The result is any potential conflicts are minimized. Surprises and questions could mean a court settles the dispute, and attorneys are the ones who will benefit, not your family. When you take that last limo ride, there really is no one who can absolutely step into your place, explain your intent, and ask everyone to honor your wishes.

Don’t Wait ‘Til It’s Too Late: Plan now, while you’re reading this–while you’re still healthy. If you wait until you become ill, or after your competency erodes, you’ll be too late. It’s far easier to challenge an estate plan that’s done under duress, or where someone is considered incompetent. Also, undue influence (someone telling you what to do) is common when you plan at the last minute—and that’s subject to challenge too.

There’s no perfect science to this—I liken estate planning to working in a kitchen. There are many ingredients, many methods of cooking. Depending on what your needs and concerns are, you can figure out which recipe to use. But you don’t have to do this yourself—consult with and hire an attorney who is skilled in estate planning to assist you in these matters.

If you would like a complimentary consultation, please call my office now at (215) 706-0200.