Tale of Two Brothers

Too often people assume making an estate plan is a one and done deal, and unfortunately, a lot of attorneys do nothing to treat it otherwise. 

However, the estate plan you are going to need in your early 30s with 2 children under 5 is definitely not the same estate plan you are going to need in your 50s, when your children are in their early 20s. It is not even the same estate plan you may need just a few years later, depending on your circumstances. 

Let me tell you a parable of two brothers. Jon and James grew up in a modest suburb of Atlanta, GA. They had happy childhoods, both playing for the high school football team and spending their summers working at the local supermarket. Well, at least Jon did, James was busy trying to get his punk rock band off the ground. When they went to college, Jon double majored in biology and business while also working in the biology lab. James majored in art history and intramural flag football, while tending bar on the weekends.

The brothers graduated and moved into their careers, Jon as a rising star in the biotech industry in Silicon Valley and James as a high school art teacher and junior varsity football coach at the high school he grew up in. People would often ask James about his brother, as they heard he was doing great things in Silicon Valley. Jon visited his hometown whenever he could, and during one visit, he prodded James to get his estate plan done, as both brothers were married with young children. “You have a young family; you need to get a plan set up to protect them. Lois [Jon’s wife] and I got ours done last year, and it is a big weight off our minds knowing we have it completed.” 

James knew his brother was right, and so he and his wife made an appointment with an estate planning lawyer friend whose children went to the high school where James taught. They got the plan set up, and James set a reminder on his calendar each year to review the estate plan. This ended up paying dividends, in a somewhat unexpected way. 

A few years after executing their first plan, James and his wife welcomed their 3rd child, a beautiful girl named Eleanor (or Ellie, as they called her). However, Ellie was born with cerebral palsy, and would most likely require a lifetime of care and assistance. 

Just after her 1st birthday, James went in for his review with his attorney. The attorney, who knew Ellie personally, recommended setting up a special needs trust for Ellie, and gave some advice regarding her care, both currently and when she became an adult. James was thankful for this, as he had not realized there was a way to provide for his daughter specifically geared towards incapacity. 

Fast forward 5 years. Jon’s career had been a smashing success; however, in the process of building his career, his marriage had taken the brunt of the long hours, which had led to his divorce of Lois 2 years prior. Unfortunately, tragedy struck again. Jon was driving down I-5, a little too fast, and was involved in a multi-car accident that took his life. 

After this tragic event, things only unraveled further. Jon’s estate plan had been made 8 years before his death, and he had not reviewed or modified it since. As a result, while his estate was being administered by James, it was discovered that Jon had omitted to remove Lois as a beneficiary from a 401K, as well as a beneficiary of a living trust (of which she was a trustee as well), the will, and an irrevocable trust.

While there were statutes in place to remove Lois from the will, those statutes did not apply to the trusts and the retirement account. James had to file a lawsuit to force Lois out of the will and to remove her from the position of personal representative of the will. Unfortunately, he was unable to rectify the issues with the trusts and retirement account. Lois, who was remarried and had spent years begging Jon (a compulsive saver) to use some of their wealth to take some time off and travel, now had a chance to pull the money out of the trusts and to use that money to live a little, a chance she did not pass up. The children ended up missing out on roughly $3 million that would have gone to them. 

As I am sure you have realized, the moral of the story is that there is no such thing as a plan that never has to change. Life is dynamic and ever changing, as Hericlitus reflected over two thousand years ago; or, as Mike Tyson used to say, “everyone has a plan until they get punched in the mouth”.

In order to make sure that you make sure your estate plan works for you when you need it, you have to review it and keep it up to date. I recommend performing an annual audit yourself. This yearly review should be a fairly quick and easy project to help you identify any changes in your plan needing to be made as a result of normal life (having more children, guardians moving away, relative dying leaving inheritance, etc). I have begun providing my clients with an annual audit checklist after we finish their estate plans, or you can download it yourself here. We are well into the year, but it’s not too late to review your estate plan. In addition to your own yearly audit, you should plan to meet with your attorney every 3 years to review your plan in greater detail. 

Download a free copy of our estate planning annual audit checklist here. Use this to evaluate the state of your plan, and determine whether modifications are necessary or not. And if you don’t have any estate plan, then you really, really need one! Click here to schedule an appointment to get started on your estate plan.

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Eifert Law Firm

At Eifert Law Firm, we are committed to constantly honing our expertise and to continue learning and innovating to give you the best counsel in estate planning, probate, estate administration, and business law.

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