Harold made a trust-based estate plan 20 years ago after his wife died. The idea was to make sure that his house and any others assets would pass to his three middle-aged children without having them have to go through an expensive probate proceeding. In the last few years of his life, one of Harold’s sons, Bill, came to live with him and helped out a lot. A few years before he died, Harold wrote on a piece of lined note paper a list of which child should inherit the china, silverware and other family heirlooms and that he wanted son Bill to be able to continue living in the house as long as he wanted to after Harold’s death.
Harold didn’t realize that he should have executed a valid trust amendment in order to change his estate plan to give a “life estate” to son Bill. Instead, what holds is the original trust giving everything equally to three children. Now Bill, if he wants to keep living in the house, will have to buy out his two siblings, and he may or may not be able to afford that.
Sam and Eunice also made a trust about 20 years ago, leaving everything to their three children equally. Around the time that they made their trust, they helped one of the children, Philip, get his first home. Sam and Eunice took title as to 50% of the house, in their names as trustees of their trust, with 50% titled in Philip’s name. Over the years, they talked to Philip about giving him their 50% of the house so that he would own it on his own, but even though they visited their estate attorney several times, they never brought that issue up and they never executed a deed to gift their 50% to Philip. Now Sam has died and Eunice has dementia. The 50% of the house plus all their other assets will eventually pass to the three children equally. That’s what the written evidence indicates was Sam’s and Eunice’s intent.
What’s going on here?
Very often people go to the trouble and expense of making a valid estate plan. They do the right thing. Then they put their plan notebook on a shelf and go about their business, also the right thing.
As time goes by, a little or a lot of time, circumstances change. The needs of adult children change. Ideas about what to do with property change.
That’s why it’s a really good idea to review one’s estate plan on some kind of regular basis.
In the cases I’ve written about here, though, the makers of the trust were getting way up in years and they just weren’t remembering to come to an attorney to review their estate plans.
Some lawyers call clients in once a year to review, and they often charge for that review.
I’m not convinced that a yearly review is necessary and I don’t do make-work to generate income. With some elderly clients, I’ll call to check in, but I don’t want to become a nudge.
Here’s what I recommend: Once a year, maybe in December or on a birthday or anniversary, take a look at your estate plan. Does it still reflect all of your wishes? If yes, put the notebook back on the shelf. If not, contact me or another lawyer to discuss what changes you may want to make.
If it’s your parents’ estate plan, you may encourage them to do the same. You can’t twist their arm to do this.
If you have events in your life such as the death of a family member, the purchase of another real property, a child moving back in, that’s also an optimal time to think about possibly revising your estate plan.
Trusts are usually called “living” trusts because they are revocable and amendable over time. They need tending on occasion. The best time to tend is when things are calm and there is no crisis. And when memories are still intact.
