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Don’t Assume Your Estate Plan is Perfect

Sep 4, 2018

Jeff Fouts: “Estate planning attorney Jeff Fouts here. It took me a while before I was able to put my finger on it, but I finally realized the existence of a serious estate planning problem among ordinary folks like yourselves. Please listen very carefully. It sounds silly, but here it is – People think their estate plan says what they think their estate plan says. Let me explain what that means.

People, if they have an estate plan, assume that their estate plan will be able to perform the list of things that they have in their head that their estate plan is supposed to accomplish. Their assumptions are not based on a true legal understanding of what their particular legal document will be able to accomplish, but rather a mis-placed and naïve presumption that they really can understand their legal documents and they will perform according to expectation.

This is a dangerous assumption, and based on my experience of interviewing thousands of prospective clients and reviewing their estate plans, the odds are very low that their estate plan will meet the family’s stated goals. In other words, their estate plans will FAIL.

Why do families have these presumptions? It’s because they perceive themselves to be intelligent people (which they doubtless are in their areas of career) and thus they perceive (incorrectly) that they can read their estate plan and correctly understand what it says. Most of the time their perceptions are not correct. And even if they do correctly understand what it the documents say, they most certainly have no inkling as to what the documents don’t say, and what language and provisions have been left out. This is a real trap.

The result of all this mis-persception is that people don’t even know what’s really in (or not in) their estate plan. Not knowing what is not in the estate plan can snakebite you. There are many examples of this, and I won’t attempt to go through the list, but as an example I will mention one.

I have clients that, due to their work through their corporation or whatever, have the right to use a legal plan which offers them some basic legal services for a greatly reduced cost. Those legal plans may offer some kind of cheap estate plan. I’ve reviewed tons of these estate plans that folks have brought to my offices for me to review. I’ll tell you about just one that I can remember right off.

This was a lady that came in, she thought she had all of her estate planning needs taken care of –because she had a simple pre-paid legal plan. She said, ‘Jeff, I don’t really think I need anything. All I need is just a deed done.’ I said, ‘OK.’ Then I ask her, ‘Do you mind if I ask you a few questions about your estate planning goals?’ I started asking questions and then, boom. We were quickly able to find out, she was able to see for herself, that her plan was faulty. She was able to see that her free estate plan wasn’t going to accomplish her goals.

Her plan had a big, big glitch in it that she had no idea was there until she had it reviewed and we started talking about if it lined up with her goals. This glitch was darn serious. This wasn’t small potatoes. The money that she thought was going to go to a certain family member was not going to end up there.

It’s pretty serious. Why? Because the plan she had was just a sloppily created skeletal document. The document was not what she needed or wanted. If we can ever help you, if we can ever review your estate plan, let us know. Thank you.”

Fouts Law Group

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