This month, rather than share about how to focus on designing an estate plan, let's discuss the plan you may already have. The first question I have is Have you read it? I mean really read it?
More and more, I am reading documents that don't share the terms that the grantor likely wanted. A colleague recently had a client bring in an old trust that started with the standard dispository language "giving the client's assets to" but then the next section was blank. There was no discussion of who was to receive the assets. Whenever I would deliver an estate plan, my strong admonition was, "Please read this entire binder completely!"
There are several reasons to read your plan thoroughly and completely in the comfort of your own home. One, you need to know what it says.
The attorney, who means well, likely made many legal assumptions in drafting your trust. You may or may not agree. Additionally, the attorney, unless he or she is a close friend, probably didn't spend more than two to four hours with you before drafting your plan. The attorney may have just completely misunderstood what you meant. And lastly, the attorney may have made a drafting mistake due to being distracted or just not catching a typo. You and your loved ones are the ones who need to assure that your plan meets your goals.
Most foundational estate planning documents are revocable. If you catch the disparity between what you wanted and what your plan states and early enough while everyone still has the issues fresh in their minds, the disparity can be easily corrected or maybe even just explained. Plans that are not corrected can wreck havoc or incur legal fees down the road.
Not only should you read your estate planning documents after they are signed, you should read at least the customized sections any time your life or the lives of your heirs or decision makers change. As to heirs, young children become mature adults, mature adults sometimes experience debilitating injuries, and then ... there is the arrival of the grandchildren! Then, there are the decisions makers, the durable power of attorney holders, the executor and the trustee; sometimes, a trusted individual becomes untrustworthy, or becomes ill, or has his or her own family issues and is no longer in a flexible position to deal with your issues. The plan should be updated for these issues, as well.
It would be grand if we could write one estate plan and have it provide concrete guidance for life, however, I continue to recall the phrase - we plan, God laughs! Plans must be carefully read when written and regularly reviewed and updated to keep up with His folly.
• Darcy K. Houghton is a resident of Carson City and works in trust and wealth management with Whittier Trust and is Of Counsel to Houghton Jones (www.hou2plan.com).