The Dayton Law Firm, P.C.

Wills, trusts and other documents must be shared with heirs

California estate planning is a forthright process, but it does not prevent obstacles from arising during the post-distribution phase. No matter how effective the planning measures contained in the trusts, wills and other planning tools, the lack of follow through or the inability to manage wealth by the heirs can result in various critical obstacles, including a rapid depletion of the assets. Part of the problem may be related to the heirs' lack of financial management knowledge and skills.

It is this crucial for the heirs to acquire some training in wealth management prior to receiving the cash and other assets. Where the size of the asset base warrants it, people should have regular family meetings to discuss with their heirs the skills that go into handling, preserving and growing financial assets. In some cases, it may be appropriate for parents to hold family retreats or workshops where their financial advisers give teaching sessions on these important issues.

Reports and statistics say that most people do not have any idea of the size, nature or details of  their parents' wealth or their estate plans. This is the wrong way to prepare for the passing and maintenance of family wealth. The heirs must be informed of  the details of the estate plan while the parents are still alive and on how to prepare for the proper handling of the wealth when it is received.

In California and elsewhere, another major problem is the failure to follow through. For example, the maker of a living trust fails to transfer the assets to the trust. If there are no assets in the trust when the individual dies, those assets will go through probate, making the trust a wasted exercise. Individuals also fail to advise their representatives and heirs of the existence of various estate planning instruments, including wills, trusts, health care directives and even a power of attorney. The storage away and forgetting about these items will possibly result in the failure to implement the benefits when they are needed.

Source: Forbes, "Most Estate Plans Fail, But Yours Can Be A Success", Bob Carlson, May 9, 2018

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