Many people assume that estate planning only involves drafting a will. It’s far more involved than that. Health care directives, powers of attorney and asset protection planning all form part of this process.
How common is it for individuals to update their estate plans?
The authors of a study commissioned by Accelerating Entrepreneurial Success found that at least 90% of high net worth individuals have estate plans in place. The study’s authors noted how very few of them regularly updated their estate plans, though. Most had allowed at least five years to elapse before making any update. The Family Office Association corroborated this data. Their researchers found that only 75% of the super-wealthy had updated their wills within the previous five years. Individuals of high net worth may be missing out on wealth maximizing opportunities because of this.
Why the estate planning process isn’t a one-time event
Most people who do engage in estate planning think it is a one-and-done event. They believe that they can draft the aforementioned legal documents and never review them again. There are many reasons why you should regularly reassess your plan, though.
Tax laws are always changing. An asset protection tool, such as your trust or limited liability company (LLC), may no longer offer you the maximum wealth benefit compared with other options. You may need to restructure your assets differently.
Court rules are also continually evolving. Judges may issue rulings that reflect a nuanced interpretation of existing laws.
Both of these factors may affect the handling of your estate after you’re gone. It’s best if you regularly review your estate plan to ensure that your final wishes are achievable within any newfound probate court dynamics.
What you should do if you don’t have an estate plan or it’s been a while since you last reviewed it
Putting California estate planning on the back burner when you get around to it is taking a gamble on your future. You run the risk of losing a significant portion of the wealth you intended to pass on to your family and other beneficiaries and a choice over what happens with your health and assets. An estate planning attorney can help you take your power back.