Your estate plan will instruct how your assets are distributed when you pass away.
If you don’t have an estate plan, then you still sort of have one. However, it’s the one everyone else who doesn’t take the time to do it right has: it’s written into the intestacy laws of the state. These may not be in the same as your wishes, but death will trigger a transfer of assets—regardless of whether it is professionally planned or not, and regardless of what your wishes may have been.
A recent article, “Why Continuous Estate Planning Is Essential For The Rich And Super-Rich,” from Forbes reminds us that estate plans should be updated regularly to address changes. These could be changes in our lives or changes in tax and estate laws. New laws and regulations can bring with them obstacles and opportunities.
The larger your estate, especially for the rich and super-rich, the more important it is to stay current. Those with complex business structures and international investments are always going to be required to adjust their financial and estate plans more often than those with smaller, simpler assets.
The more investments you have, the more important it is to be on top of the situation to be certain that your wishes are carried out at death.
Updating estate plans for everyone is a wise move. However, many fail to stay current. About 90% of highly accomplished business owners have estate plans that are more than five years old. These people are ignoring ways to maximize their wealth, but more importantly, they may also be setting up their wealth to be distributed in a manner that doesn't reflect their current wishes.
The statistics are similar for many of the super-rich. They, too, have outdated plans. Research shows that the estate plans for the exceptionally wealthy families are also more than five years old.
An estate plan that’s more than a few years old should be reviewed and adjusted as needed, with the help of a qualified and experienced estate planning attorney.
This potentially severe mistake of failing to ensure that estate plans are current is a mistake that is easy to fix, if you act rather than wait until it’s too late.
Reference: Forbes (September 6, 2017) “Why Continuous Estate Planning Is Essential For The Rich And Super-Rich”