Readers in United Kingdom who are considering creating a plan to distribute their wealth may want to know that just making a plan and filing it away often isn’t enough to assure that everything goes smoothly. Estate planning documents that have been drafted more than a few years ago may fail to take into account life changes such as divorce, a new business venture or changes in the tax code. Wealthy individuals are usually careful to check their plans annually, and this is a good idea for those with fewer assets as well.
Estate plans that are out-of-date or inadequate can cause expensive squabbles between the heirs. In most cases, these issues can be avoided if everyone is willing to face what can sometimes be unpleasant conversations about the death of a loved one. A financial adviser is often helpful in such cases since a third party can more easily bring up difficult topics and help bridge the divide over family differences.
Sometimes estate plans aren’t changed simply due to the costs involved in making the updates. In other cases, the wealth holder, the family or both are very reluctant to discuss the issues even with a neutral party leading the conversation. However, experts say one of the main reasons for poor estate planning is the adviser involved in the planning simply failed to bring the issue to the attention of the estate holder.
Individuals who hold even a moderate amount of wealth would likely benefit from an estate plan that is well constructed and kept up-to-date and which can avoid family fights and allow assets to be distributed to the proper parties. It is especially important to review an estate plan when there is a major life event or an update to the tax laws.
Source: Forbes, “Why You Should Update Your Estate Plan“, Russ Alan Prince, July 03, 2014
