I have asked groups of Seminar attendees over the years what specific nemesis has cost individual Americans the most over the years. The most prominent answer has been “taxes.” Yes, taxes are a nemesis and they are costly, but in most cases, a necessary cost to our democracy. The answer, unfortunately, is not necessary and can be avoided. It has become a cancer in our society and can devastate a family financially. It’s called PROCRASTINATION, and we all have been affected by it sometime in our lives. When do we most see it?
1.When new, potential clients come in for a consultation and learn that a Will does not protect an estate from probate. In fact, that is what probate is for – Last Will and Testaments. “Mom said she was going to get a Living Trust but never did.”
2. Clients come in with the Trust of a now deceased parent. “We were told that a Trust would avoid probate but mom/dad never changed title of assets to the Trust.” Only a properly funded Trust can avoid probate.
I cannot tell you how many times we have seen this problem. There are two steps to an effective Living Trust.
a. Executing a properly drafted California Living Trust;
b. Changing title to probate assets (real estate, cash accounts, investment accounts, etc.) to the name of the Trust.
3. Designating beneficiaries on IRAs and other retirement plans. “Dad has an IRA and named his IRA beneficiaries in his Will. He had a beneficiary form but never got around to it.” Oh No! Please don’t tell me this. A Will cannot replace nor dictate who gets IRA funds on a IRA beneficiary form. Where is that IRA going? To probate.
4. “Mom designated her two brothers as her Successor Trustees in her old Trust. They both have been deceased for almost 10 years. She said she was going to amend her Living Trust and appoint us children but it never happened.” Now what? You guessed it, the Trust is headed to Court proceedings.
5. “My husband and I were going to change our A-B Trust to a Simple Trust long ago but just never did it. What happens now that he is deceased? Is it too late to change from an A-B?” The answer, unfortunately, is yes. She will now have to divide the Trust estate into two Trusts; change title to assets; file a tax return for both Trusts annually; and keep a record of income and principal withdrawals from Trust B – costly and frustrating.
These are only a few examples of how procrastination creates costly havoc in families. Have you had your Living Trust and Estate Plan reviewed for updates and changes in the last 4 to 5 years? No? This is your opportunity to avoid procrastination. Pick up the phone and call (858) 792-0909 or email me at jes@jackstephens.com for a consultation NOW.
What was the thought that just entered your mind? “I’ll do it next week.” Oh, okay. You better read this article AGAIN.