I’m attorney Paul Bernstein of the Bernstein Law Group. We’ve dealt with many, many local area families over the last 25 plus years in creating their estate plans. And we frequently use the analogy of building a house when we talk about designing and creating someone’s estate plan.
Blueprints for the house
When someone wants to build a house, they usually start off with having a lot of land. They want to make sure that it’s the right house for them so they meet with an architect. The architect creates blueprints after some conversations with the clients, the clients review the blueprints, and the architect then makes any adjustments to that before the house is being built.
Blueprints for the client’s estate plan
In the estate-planning world, we meet with clients and we map out or basically create the blueprints for the client’s estate plan. We make sure it makes sense to the client and see if we have to make any adjustments to the blueprints before we start creating the estate plan itself.
The house is being built
So the first step is mapping out or designing the plan, much like an architect would. Then the architect gives those plans to a contractor who builds the house, and the clients will do a walkthrough once the house is built to see if they have any items that they want to have addressed or changed.
The documents are drafted
And in the estate-planning context, the documents are drafted based on the design blueprints, if you will. And the clients review the documents, frequently with the attorney himself or with someone in the firm. We’ll walk through, make sure it’s the right plan, and answer any questions they have.
And if we need to make any adjustments to the documents, we do that. Then the client signs the documents. That’s just like a house that is now built. The contractor has handed over the keys to the clients and now they have their house.
Moving in the furniture
But the house isn’t ready yet to live in. We have to install appliances and move the furniture in before the house is actually livable. And in the estate planning context, just because we have the documents, when we’re dealing with a trust centered plan, which many of our clients have, we also need to make sure that we have changed the ownership of the assets from them as individuals to trust owned assets.
Funding the trust
So we deed the real estate into the trust. We make sure bank accounts are properly titled in alignment with the trust. We change ownership of investments to the trust. We look at all the various assets and either change ownership over into the trust, or look at the beneficiaries to make sure the beneficiaries are aligned with the estate plan. That’s like moving the furniture in. We call that process funding the trust.
When things can go wrong
As I mentioned earlier, unfortunately we meet with many people that have a trust centered plan that they went to a different attorney with, and we’re not told about funding the trust. Therefore they spent the time, effort and energy to create an estate plan, thinking they we’re avoiding probate court, but they’re not avoiding probate court at all.
It’s now going to be a probate settlement and a trust settlement. That’s great for the lawyer, who’s making a lot of money, but not good for the family. We need to make sure the furniture is moved in for the trust to work fully.
The last step: maintenance
And then the last step with a home, as any homeowner knows, is that we have to maintain the home and make sure that it’s working properly because over time, things happen. It’s the same in the estate-planning context. Things are always changing, sometimes not that frequently, and sometimes very frequently.
And that could be due to changes in the law, changes in the tax rules, or changes in the client’s relationships with people or just in what the client owns. So a method needs to be in place to make sure that the estate plan is reviewed, monitored, and adjusted over time. I hope you found this information illustrative on what the estate planning process looks like. If you have any other questions or you are just not sure what to do, feel free to reach out to us.