Most estate plans don’t work. That’s right, they don’t. It seems ironic for me as an estate planning attorney to be saying that, but that’s my experience.
The most common goal of estate planning clients is that they want things to “go smoothly” for the people they leave behind. What I’m saying is that things often don’t go as smoothly as people might expect.
How would you know if your plan worked? Better yet, when would you know? You can’t know that until after you’re gone, right? Depending on where you end up — up in the clouds looking down (the best option), or somewhere else — you might be able to see what happens after you die, but by then it’s too late to do much about it if things aren’t going smoothly.
One reason that happens is that people take a “single transaction, document oriented,” approach. They do a will, a power of attorney, a health care proxy, a trust, etc., and then forget about it for years. (The average time between plan reviews, studies show, is 18 years.) In the meantime, the biggest threat to their estate plan is change. The law changes, their circumstances change, their finances change, etc.
For example, let’s say twenty years ago a couple prepared simple wills giving all their property to each other, and then their property went outright to their (then) minor children, appointing guardians for their children. Now, their children are out of college. One is getting married, and the other, with children, is getting divorced. The couple’s financial wealth has substantially increased. They want make sure their financial legacy stays in the “blood line” in the event of divorce. What made sense years ago just doesn’t make sense now.
So their plans, to one degree or another, won’t work. It takes a more long term commitment to your plan than the traditional, transaction based approach.
So, what can you do? Take steps now, while you’re alive, to make sure things go smoothly. In my experience, the steps you can take are referred to by members of the National Network of Estate Planning Attorneys (of which I am one) as the Three Step Strategy™:
1. Establish your plan with counselling oriented planning partners;
2. Commit yourself and your loved ones to a formal and continuous maintenance and education program; and
3. Secure appropriate assistance to transfer your wisdom along with the rest of your wealth.
If you really want things to go smoothly for your loved ones, adopt the Three Step Strategy™.