You consulted an attorney, who drafted an estate plan for you. That’s great! What year was that? How old were you? Have your life circumstances changed since then? Have you gotten married, divorced, had children, accumulated wealth, bought or sold property, or become a millionaire movie star/heartthrob?
If any (or all) of the above apply to you, you probably need to update your will and/or trust. Having an outdated estate plan can defeat the purpose of having an estate plan in the first place. It can create confusion as to your wishes, may fail to provide for your loved ones, or may be inadequate for asset protection purposes.
Even millionaire heart throbs need to update their estate plan.
Consider Paul Walker. From the information available, he very prudently set up an estate plan in 2001 at the tender age of 28. At that time, he was a young working actor, had a young child and the first installment of The Fast and the Furious had just been released.
Last November, he died in a tragic accident at age 40. By that time, he was a multimillionaire, filming the seventh installment of an internationally-successful movie franchise. His now 15-year-old daughter had been living with him for three years. He had an extensive collection of exotic cars. He was in a substantially different place professionally, financially, and in terms of his family than he had been when his estate plan was drafted.
Failing to update his estate plan to better reflect his situation in life will cost his estate (in effect, his daughter) a lot of money and lets the public into his private affairs. Because his 2001 estate plan used a pour-over will to fund his trust, the will must go through probate. The probate process makes the will a public document, which is they only reason we know anything about his assets (and would a 40-year-old Paul Walker want the world to know how much money he left to his teenage daughter?). In addition, there are significant fees and costs associated with probate.
In addition, an updated estate plan could have saved his estate a significant amount of money in federal estate taxes. Although we don’t know how much his estate was worth in 2001 when it was drafted, we know that it must have been worth significantly less than the $16-25million it was reportedly worth at his death. Although the federal estate tax limit has varied in recent years, an updated estate plan could have employed asset protection measures to preserve more of the estate (that will now go to pay estate taxes). Asset protection of that sort was probably unnecessary in 2001, before he was earning multiple millions of dollars per movie.
If it has been a while since you’ve updated your estate plan, please consult an attorney to make any necessary changes. If you’re like us and have moved a few times, it might take you a while to locate your copies (or even your former attorney’s name). If you no longer have contact information for the attorney who drafted it initially (and it was in California), try the Attorney Search function on the State Bar of California website. Although you’re under no obligation to use the same attorney to draft your updates, you will need your records.
After all, the best way to ensure that your wishes are followed is to make them clear and up to date.