What Are Signs That My Estate Planning Documents Or Trust May Be Outdated?

Most estate planning attorneys, including me, will give a free consultation if a potential client has a question regarding his/her estate planning needs. If you ever have any fear, doubt or questions, bring them to a knowledgeable estate planning attorney. If a potential client sets an appointment with me, I ask them to bring in all existing estate planning documents so I can review them with the potential client and discuss how their life and goals have changed since the creation of the estate planning documents being reviewed. In some instances, the existing estate planning documents are sufficient and will achieve desired results. If this is case, I’m happy to provide this advice and send the potential client on his/her way knowing his/her estate planning documents are appropriate. If the documents no longer reflect the client’s desires or circumstances, I’m happy to work with the potential clients to create new documents at a cost-effective rate.

How Often Should We Review And Update Our Estate Plan?

This is a good question. As a rule of thumb, I’d say whenever there’s a death in the family, a divorce in the family, a marriage in the family, a birth in the family or a change in the family dynamic. It’s also a good practice to review your  estate plan at least once every decade because, let’s face it, time makes fools of us all.

Will A Trust Avoid Probate?

If a trust is a standalone trust, such as a Medicaid Asset Protection Trust, yes, the trust can be utilized to help a client avoid probate. If, however, the trust is a testamentary trust, probate cannot be avoided and, in fact, is required before the trust is even effective. Even with a standalone trust, the trust can only allow a client to avoid probate if the trust is appropriately funded and the client ensures he/she has beneficiary designations on all accounts/assets that are not transferred into the trust.

I hear from a lot of clients that they are bombarded with calls to create a trust to avoid probate. While this may be a goal of the client, it must be explored why the client wishes to avoid probate. In New York, the probate process is not overly burdensome, so if avoiding probate is not the primary goal, clients may be surprised to hear knowledgeable estate planning attorneys actually recommending an estate plan that includes the creation of a Last Will and Testament and, eventually, probate. There are two primary instances when I usually recommend avoidance of probate: the first is when the client owns real estate in multiple states, which requires having the client’s Will admitted to probate in every state in which the client owns real estate; the second is when the client has a particularly litigious son/daughter who will do all he/she can to make probate difficult and expensive.

The above being said, I think it’s important to explain how a standalone trust avoids probate.  All Trusts, including standalone trusts, contain provisions that say where trust assets pass after the creator’s /client’s death. Therefore, any asset transferred into the trust by the creator/client will pass pursuant to the trust’s terms, without the need for probate. However, with most standalone trusts, clients typically do not transfer all assets into the trust, and in order to collect the assets outside the trust, probate may be needed. In addition, because clients want flexibility when creating a trust, especially a Medicaid Asset Protection Trust, a provision is typically included in the trust that says that the creator/client can change the distributions provisions of the trust by writing a Last Will and Testament specially for the purpose of changing trust beneficiaries, and, of course, this Will must be admitted to probate to effectuate the desired change.

For more information on Reviewing & Updating Your Estate Plan, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (516) 888-5381 today.