Unpopular opinion: ‘funding’ or ‘aligning’ your assets is one of the most important things a client can do to ensure the success of their estate plan. To illustrate, please enjoy this very complex metaphor concerning how and why a person would align their assets: If your Estate Plan is a ‘bucket’, and your assets are your ‘stuff’, funding/aligning your assets is putting your ‘stuff’ in your ‘bucket’. Wills, Trusts, Ancillary Documents, are all the foundational building blocks of your Estate Plan and are definitely necessary to make sure your ‘stuff’ goes where you want it to. However, even if you built the perfect bucket, if you never put anything in it, no one can take anything out.
To explain things a bit more in depth, take for example, your bank accounts. While your estate planning documents may have designated all of your bank accounts to your family, the bank can refuse to distribute the funds in a timely matter for many different reasons. There are a variety of situations in which one’s family members may need to go through a lengthy and expensive process through probate court in order gain access to the assets that their loved ones left behind for them. However, if the account is already owned by a person’s trust during life, there is no need have to go through a lengthy probate court process. A simple form to change the ownership to one’s trust, puts the asset directly in ‘the bucket’. Simply, those who have been designated as trustees, have legal authority and can immediately gain access to these assets through this method.
The process of aligning assets looks different for every type of asset: cash accounts will need to change ownership, while life insurance and retirement will need to have beneficiary changes, the whole process can become quite complicated. A common practice in estate planning, is to give documents to a client, and advise them to align their assets themselves. While, good advice, in our over 35 years of experience, we have seen that less than 5% of clients will actually follow through and get the assets aligned consistent with their estate plan. At Family Estate Planning Law Group, we do not leave the most important part of an estate plan being completed up to chance (and a small chance at that) as we include this essential service as part of our ongoing client care program that all our clients participate in. We have a dedicated team that keeps track of your ever changing assets, and interfaces with institutions, advisors, other attorneys, etc., in order to mitigate errors that often occur with this complicated process.
No matter what your estate plan is, take a look to make sure all of your ‘stuff’ is in your ‘bucket’.