CHAPTER THREE The Necessity of Estate Planning
Before I explain the critical need for estate planning, let me share a true story of a couple who believed their estate was in perfect order. It wasn’t until after reading my book that they reached out, wanting to review the planning they had already done. Here are the facts: They had $1.3 million sitting in a checking account, earning almost nothing. • They had $1.3 million sitting in a checking account, earning almost nothing. • They held an investment account that was costing them approximately $18,000 per year in fees and commissions. • Their attorney, back in the late 1990s, set them up with two separate Living Trusts — and a few years later charged them a large additional sum to amend those Trusts. • And their stockbroker and insurance agent had them in a variable life policy which should never be inside a person’s estate due to uncertainties. But through my discovery process, we uncovered a devastating oversight: none of their assets had ever been funded into their trusts. This is a huge and expensive problem, but solvable. What did this mean? At death, nearly all of their assets would have been subject to the Probate court — exposing their estate to unnecessary delays, legal battles, and thousands upon thousands of dollars in costs. In other words, all of their efforts (and all of the fees they paid to professionals) had left them with an estate plan that was essentially worthless.
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