A well drafted estate plan is indispensible in regards to protecting one’s family, property, assets, and benefits. Yet, as life events develop, estate plans must be updated or they become irrelevant.

Some suggest having your estate plan reviewed annually. Changes in the economy or tax code might affect the plan. Others suggest having your plan reviewed every five years. Still, perhaps the best suggestion is to have your plan reviewed and updated immediately after any major life changing event. But what is a life changing event?

Well, let’s say for example, you and your spouse have a child. That is a fairly major life changing event. As such, you might want to add the child to your Will and maybe set up a Trust for her or him. If you purchase a home, certainly you want to add the home into your Trust. If in the process you sold your existing home, you will want to remove the sold home from the Trust. Suppose you start a business, close a business, divorce, remarry, your child makes you a grandparent, etc. All of these are major life changing events. All of these examples will assuredly affect your estate planning.

The purpose of an estate plan is to avoid probate and to keep the state from deciding how to divvy your possessions, at your expense and that of your heirs. However, an out of date estate plan is near worthless and easily contestable, leaving your estate wide open to the possibility of a messy probate.

Here is another way of looking at it. An estate plan is a tool intended for the use of protecting yourself and your family from probate. Like any tool however, it must be stored somewhere safe, maintained, cleaned and repaired when necessary; treated as such, an estate plan will prove invaluable in the securing and protecting of your estate.

A potential client was looking for help with Probate. Her husband had died suddenly, unexpectedly and without a Will. The couple was the perfect example of a blended family, where husband and wife lived together, both having and living with children from previous marriages.

Having been married when her husband died, the wife expected to inherit shared assets including the house. Many people coming to our office assume everything will automatically transfer to their spouse. Unfortunately that wasn’t meant to be.

California law dictated that in cases where children were involved, and in the absence of a current or properly drafted Will, the surviving spouse was intended to receive no more than 50%, and no less than one-third of the assets.

To better explain, let’s say there was only one child. In that case, the wife and the child would split the assets 50/50. However, if there were two children or more, the law stated the wife could not receive less than one-third.

What that meant for the wife was that she now only owned one-third of her own house. The other two-thirds had to be immediately split among the husband’s children, and immediately split meant selling the house the wife loved, and hoped to remain in until she died.

If the husband had a current and properly drafted Will prior to dying, he could have left the house to the wife if he so wished. Sadly, he didn’t, and his wife was served a notice of eviction.

An attorney’s responsibility is to bestow knowledge, guide us, offer suggestions and advice and provide us options if there are any. Yet, sometimes the best they can do is to tell us how it is and why it is that way. This situation was one of those sad cases because of a misunderstanding of the law. But even in a situation such as this, the family could have found some small comfort had there been a properly drafted Will.

It wasn’t long ago that Debbie met with a prospective client, who was interested in filing for Medi-cal benefits for her special needs child. During her consultation the client revealed that she in fact, already had an Estate Plan which was drafted for her by a past attorney. In said Estate Plan, the client had chosen a family member (who she was less than fond of) to be sole beneficiary. When asked why, the client revealed she had a special needs child and worried about the well being of her child once she passed away.

The client made it clear that if possible, she would have preferred her assets and money go directly to the child, but didn’t think it was possible because the child was special needs.

What the client didn’t know was she could in fact leave her property and assets directly to her child, through a Third Party Special Needs Trust. Not only that, but with the use of the Third Party Special Needs Trust, the client would not only be able to provide a residence and pay the child’s utility costs, she could do so without her child’s Medi-cal benefits being dropped.

Most importantly, the client didn’t have to bring in a third party and hope that her money was distributed properly per her wishes. She had peace of mind knowing they would be.

The moral of this story is to never settle when choosing beneficiaries. The very idea of an Estate Plan is to insure your needs are met. As a client, it’s you who pays the drafting costs. The assets being distributed are yours. It only makes sense that your Estate be directly distributed to people of your choosing, and not to those of your second choosing. One of the greatest benefits of a living trust is that it can be drafted to follow your goals and wishes for your unique family.

As a rule, people associate needing an Estate Plan with dying. They think of it as something they need to do in order to close their affairs and to leave something behind. However, Estate Plans can also be of use to the living.

At present we are handling a conservatorship case where the mom was diagnosed with dementia, severe enough that she is legally unable to make financial or health related decisions for herself. At the same time, she requires round the clock supervision.

In an effort to assist mom, both of her adult children had taken time to stay with her. No small task considering both lived, worked, and had family outside of the country. Yet, because they did live outside of the country, the law would not allow either to accept the role of conservator.

What this means is for one or both of them to be conservator, they would need to move back to the United States permanently and stay with mom full time. A solution they both hoped to avoid.

What was needed was a fiduciary (an unbiased third party who could make decisions on behalf of mom, while communicating the necessity of those decisions to the children). That way mom could be relocated to a full time care facility, or a care provider could be brought into the home, offering a much needed break for the children should one continue to reside there.

In our case, the problem was that although the fiduciary was a perfect viable solution, the children resented having someone who wasn’t family making family decisions. Still, the sad fact remained that unless one or both of the children were willing to move back and live permanently in the United States supervising mom full time, the fiduciary was their new reality.

This story doesn’t currently have an ending, happy or otherwise. It does however speak to the importance of having an Estate Plan, and how beneficial a plan is for the living as well as the dead.

Sadly mom didn’t have an Estate Plan, but if she did have one drafted and signed prior to becoming ill, she could have made the choice as to who would make her financial and health care decisions. She could have chosen either child, or appointed someone else entirely, regardless of their address, even if they did reside outside of the country, and there wouldn’t be need for a fiduciary.

Ever the optimists, we hold faith that this case will resolve itself rightly. More so, we appreciate and praise the efforts of the fiduciary, and we assure the reader that everyone involved in this situation has the mom’s best interest in mind. Still, had there been an Estate Plan, the process could have been relatively painless. Tension and stress could have been minimized and the family could have handled family business without outside involvement.