Broker Check


Have You Disinherited Anyone…Unintentionally?

| March 26, 2018

You may be surprised to learn that this is actually very common. Figuring out where you want your legacy to go and exactly how you would like everyone to receive it may be easy for you - or not, but even the simplest most straightforward estate plans don’t always actually turn out how you wanted them to. In fact, they may not achieve your wishes at all.

Recently we reviewed a new Will. It was beautifully detailed and it was easy to see that this couple had spent a lot of time figuring out where and how their lives’ legacies were to be distributed. There was only one problem - none of their plan could work out the way they intended it to.  A Will alone doesn’t dictate what will happen to your assets after you are gone. This particular couple spent a lot of time and money to set up something that would never be used. Why? There was nothing there to fund it. It wasn’t that they didn’t have the money to do what they wanted. It was that the type of assets they owned wouldn’t allow for it, or at least allow for it without an extreme amount of cost and/or tax.

And this isn’t the first time. In fact, it happens quite often. We have learned to encourage the families we work with to let us help them with their estate planning before they ever step foot in an attorney’s office. We can then quarterback the situation and help the attorney help them address what is necessary and what is not.

It is a frequent occurrence that we see a Trust, or even several Trusts, set up after the family has spent thousands of dollars making everything perfect…or so they thought. When it comes down to the nitty gritty, however, those Trusts would never be used because they had never been funded. Here is a key indicator for this: if you never spent the time to retitle your assets after you set up a Trust - real estate, investments, bank accounts, or businesses, there is a good chance you will be in the same boat.

Even the smallest estates have this issue. A common issue we see time and again, is a parent adding one of the children as an owner on their bank accounts. Beside the fact that they just opened up a huge liability risk, their other children was just disinherited from everything in that bank account.

We often see people spend a lot of money updating their Wills just to find out that everything they own has a beneficiary designation and the only thing that will be left to the Will is the house and the car. Even worse, as an attorney shared with me recently, even those two assets (the house and car) can bypass what the Will says.

Whether you have an estate of a hundred thousand dollars or a hundred million dollars, someone needs to be taking a holistic view of your estate. An attorney, in most cases, is just writing the documents. Even the most complicated estates require a team of professionals. Someone who knows the ins and outs of the tax laws, someone that knows that person’s unique situation (their family, businesses, goals, financial plan), someone that knows how to write the legal documents and even other specialists may be necessary—insurance, investments, etc. Most of the attorneys we work with rely on us to quarterback all of this. They don’t do it and don’t want to do it.

Bottom line: Your Will may mean nothing. You may disinherit your loved ones, and your legacy may never be set out to accomplish your wishes. The idea is that your Last Will and Testament is a document for you to express your wishes – make sure that is exactly what you are doing.