Highlights from an Estate Planning Seminar

I recently attended a local estate planning seminar geared for- and marketed to- older adults. I decided to go “undercover” to see if there was any evidence of manipulative sales practices masquerading as “financial education.” Sadly, I found some. 

Specifically, a presenter who was not an attorney and had no recognized financial planning designations whatsoever pitching the legal services of a colleague who was not in attendance. The original program publicity contained neither the name of the sponsoring company or the presenter’s name or credentials.

                                                  Barbservations

I counted at least 50 times the presenter used the phrase “I’m not an attorney but…”and at least 30 pitches for revocable living trusts as suitable for everyone without considering the specifics of their financial situation. The presenter also threw out many legal terms (e.g., A/B trust) without explaining them, disparaged the probate process repeatedly, and occasionally presented dated information (e.g., incorrect gift tax and estate tax exemptions from 2021).

In addition, he distributed a so-called “Consumer Survey” at the end, ostensibly to solicit feedback on the seminar but primarily to harvest participants’ personal information (e.g., date of birth) and contact information (address, e-mail, and phone number). I took my survey with me and left the seminar shortly thereafter when the presenter started pitching various “combo packages” for legal documents. I don’t know how many participants actually returned this form.

Nevertheless, despite all my misgivings about the content and format of the estate planning seminar and its marketing pitches, there was some helpful information shared. 

Below are eight useful “nuggets” to consider as you make plans for the management and distribution of your assets both during your lifetime and upon your death:

Check Document Reciprocity- Discuss this with an estate planning attorney when you move to another state. Many states have reciprocity with other states. This means that a state (e.g., my home state of Florida) will accept any will as valid if it was valid in the state where it was prepared. However, valid wills from other states may still be difficult to execute due to differences among state statutes and how they are interpreted. An attorney can identify legal landmines.

Get Everything in Writing- Recognize the power of legal documents, such as wills and trusts, that provide documentation and enforcement regarding a person’s wishes regarding the distribution of their property. Oral promises made to someone are non-binding. The speaker recounted a story of a deceased man’s second wife who promised to “take care of” his children (her stepchildren) financially, but kept everything for herself and did not give them any money.

Avoid Document Conflicts- Make sure that there is no conflict between a will and other legal documents relating to the ownership or distribution of assets. The title on assets (e.g., joint ownership with right of survivorship) or beneficiary designations on contracts such as life insurance policies, individual retirement accounts (IRAs), and tax-deferred employer retirement savings plans always take precedence over the terms of a will.

Review Beneficiaries- Periodically review (and revise, if needed) persons named to inherit your assets or manage your financial affairs. These people should always be people that you trust and people who are capable of performing their designated roles. Use this worksheet to list all of your beneficiaries and personal representatives in one place.

Keep Heirs Updated- Communicate ongoing changes to estate plans. The speaker noted that updates to estate planning documents should be shared with trusted family members. He noted that a common reason for estate planning challenges in the court system is when people change their legal documents but never notify their loved ones about the changes. Family members and/or other heirs, who have copies of previous versions of the legal documents, later contest the change.

Expect Probate Expenses- Be aware that there is a cost to settling someone’s estate. Probatable assets are those that are owned by individuals without a named beneficiary or survivorship right. For example, a bank account, a mutual fund held in a taxable account, and an automobile. Probate estate administration costs vary according to the size and complexity of someone’s financial assets. The complexity of the probate process also varies among states. The workshop presenter cited several sources that estimate the cost of probate as between 4% and 7% of the value of the assets being probated.

Retitle Assets Within Trusts- Expect that setting up a trust will take some time and “legwork.” When someone becomes the grantor of a trust, their individually owned assets must be retitled into the name of the trust, which becomes a separate legal entity. Assets that can go into a trust include deeded assets like a home or other real estate, financial assets (e.g., bank and investment accounts), collectibles, and life insurance.

Don’t Procrastinate- Take action to address gaps in estate planning whether it is getting legal documents prepared or updated, making a list of digital asset usernames and passwords, or communicating estate planning wishes with trusted loved ones and/or designated personal representatives. If not today, when? The future is not promised to anyone.

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.