Estate Planning Myths: Debunked
Addie sets the record straight about a very common estate planning movie myth.
I bet when you think of estate planning, you think of a movie or TV show where a lawyer reads off the contents of a will to the surviving members of the family.
Have you ever wondered if this depiction is accurate or not?
Here’s a hint: this common cinematic trope is not exactly the way it’s done.
This Hollywood habit may be harmless.
However, if this is the only representation of estate planning you’ve seen, then you might be in for a rude(ish) awakening when it comes time to deal with a loved one’s affairs after they pass away.
In fact, many of my clients do not fully grasp what their loved ones will be responsible for once they pass away.
As an estate planning lawyer, I come face to face with many different clients with varying levels of understanding of the estate planning process.
I truly enjoy thoroughly discussing options and creating estate plans that work best for each of my clients.
It’s why I do what I do.
Bottom line: a full knowledge of what estate planning really is can only simplify the process for you and your loved ones.
It is my hope for estate planning conversations to happen openly and often.
Maybe then we’d see a more accurate representation when comes to movies and TV.
Let’s talk about what an estate plan really does after someone passes away.
You might be familiar with the often-depicted ‘reading of a will’ scene in movies and TV shows.
In these scenes, a family is gathered in a lawyer’s office, dressed in black, with tension rising as a lawyer formally reads the will out loud. Line after line, they dole out cash amounts and houses to the surviving family members (or to some unknown party - *cue dramatic music*).
This is probably a scene where there’s some shocking revelation or plot twist, right?
This ‘reading of the will’ trope is far from common.
I always encourage my clients to have frank discussions with their loved ones about their estate plans. It’s very important to let those affected know what is expected of them, and what they can expect.
In these ‘reading of the will’ scenes, the contents of the will is usually a shocking reveal.
Let’s debunk this estate planning myth:
Truth #1: Most estate planning and probate attorneys have never actually done a formal reading of the will.
Truth #2: Even if this meeting were to happen, it would have very little effect on the formal estate planning process, anyway. The estate planning process happens almost completely prior to one’s death.
Truth #3: These scenes imply that these (ridiculously wealthy) people went through an intricate estate planning process with a lawyer (or a team of lawyers), but failed to name an executor or even have an estate planning discussion with their family or executor.
Maybe this happens, but there still wouldn’t be a dramatic reading of the will, in almost all cases.
As an estate planning lawyer, I by no means require a dialogue between my clients and their families. However, I’ve found that it’s common practice that people will include their loved ones in their own plans.
If I’m your lawyer, I can offer guidance on what this conversation should entail for you and your situation. In this blog, however, I provide general guidelines that can help shape your next steps.
If you have questions about your specific situation, I recommend finding a lawyer licensed to practice in your state. If you’re in Louisiana, find out more about booking my estate planning services here.
What happens when someone passes away with a will?
Well, most likely, the person writing the will has named an executor.
Typically this person is a family member or surviving spouse who is designated to be in control of the estate plan upon the will writer’s death.
Normally, the executor knows some or all of the following:
Where the will is stored.
The terms of the will
They’ve probably even discussed the estate plan with the person who has passed, so they’ll know the specifics and scope of the estate in question.
If a lawyer helped design the estate plan, the executor might have their contact information.
Do you want more info on the duties of the executor? Check out my blog post with a step-by-step guide to being a well-prepared executor in Louisiana.
As the executor, some duties might include:
Filing a final income tax return for the estate.
Entering the probate process, if necessary.
Making funerary arrangements.
Contacting next of kin.
Settling accounts like checking, savings, 401ks, stocks, and even real estate holdings.
Have more questions about this? Find out more about the executor role and how important preparing for this role really is here.
Many times, spouses will name each other as executors of their estates. This is common practice and suitable in most situations. However, as spouses age, I encourage a conversation with younger family members and/or adult children. Doing so will better prepare your family for the unexpected.
There are times when I am contacted by a surviving family member on behalf of an aging executor, typically an adult child. I strongly suggest keeping your estate plan updated, so that the executor of your will be someone who is able to perform their duties at this crucial time. When creating your estate plan, you should discuss the best options for your particular situation with your lawyer.
Don’t put off til tomorrow, what should be done today.
What role does a lawyer play in executing the estate plan?
Upon the person’s death, the lawyer in charge of the estate plan may be the one who contacts the disclosed beneficiaries. But, this isn’t always the case.
So, yes, a lawyer would have had to be involved in the estate planning process for this to happen. Meaning, a lawyer will not suddenly pop up with a will, if they were never involved in the estate plan in the first place.
However, if they were in charge of preparing estate plan documents, then typically, this legal correspondence would happen in letter form, and with the purpose to inform designated parties of their awarded assets; a copy of the will is often included in these communications.
An estate planning lawyer would only reach out to parties who are named in the will, according to the will’s instructions. Another reason why it’s so important to keep your estate plan up to date and aligned with your estate planning goals.
Keep your will updated by thinking about the following:
accurate mailing addresses for beneficiaries
accurate phone numbers for beneficiaries
an up-to-date inventory of properties (did you buy/sell a property?)
an up-to-date list of your beneficiaries (did your spouse pass away? did you get remarried? did your kid get married?)
change in estate planning goals (did you sell your business? did you sell stocks? did you have a grandkid? did new legislation pass?)
accurate and timely assignment of roles (is your executor an aging spouse? did your executor pass away? have you lost contact with your named executor?)
By keeping your will updated, you take the guesswork out of your estate plan, easing the responsibilities of your loved ones. It’s as important to keep your estate plan updated as it is to create one in the first place.
Don’t go another year without a will.
I will guide you on how to protect yourself and your loved ones.
How I prepare my Estate Planning clients:
For my Louisiana estate planning clients, I include a secure document folder (fireproof + waterproof) that contains their essential estate planning documents.
I instruct my clients to keep this folder somewhere safe, yet accessible. It’s good to inform your executor where it will be kept.
Inside that folder, I’ll have my contact information secured in the folder, so that the executor can make contact with me if needed. This is usually a sticker that sticks right to the folder, so there’s little chance of the info getting lost in the shuffle.
I also encourage my clients to have discussions with their executors prior to their death, if possible, to get a plan in place.
Here’s an example of what it looks like:
This folder is incredibly important. It ensures that, upon the loved one’s death, the executor will have all their information in one place. They’ll even have my contact information should they have any questions or need my services.
If you already have an estate plan, make sure you have this information included with it.
In fact, go ahead and do that now, then come back and keep reading.
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Additionally, I prepare a Google Drive folder and instructional video library for digital safekeeping.
Typically, I include a PDF with the full catalog of estate planning documents. Then, I include separate PDFs including each estate planning document, for easy access. This allows my clients to access, say, their durable power of attorney document, without having to include their entire estate planning catalog. This comes in handy when dealing with end-of-life care and preparation, among other scenarios.
Having digital backups of your estate plan is incredibly important, especially for Louisianans who have adapted to hurricanes and other weather events as a way of life.
I encourage a healthy balance between redundancy and privacy when storing your estate planning documents. Uploading your estate plans onto a USB drive and storing it in a safe-deposit box can also be a solution for some. Additionally, sharing a Google Drive folder, or USB drive, or sharing hard copies of provided PDFs with your executor or adult child can ease the burden of having to locate one-of-a-kind documents when the time comes.
Estate Planning is way more than a will.
It’s time to get prepared.
What happens if someone dies without a will or estate plan?
Unfortunately, this happens more often than you might think. It’s also why I spend as much time as possible advocating for everyone (yes, even you) to write your will TODAY.
Let’s talk about if someone dies without any estate planning at all:
Unfortunately, a loved one has passed without a will or estate plan of any kind.
The responsibility falls to the surviving family members to do the following:
First, they’ll need to find all important documents, including records of assets, bank statements, property deeds, retirement accounts, etc.
Yes, that means you’ll most likely need login information (including emails and passwords) to get into each of these accounts.
This can be a tedious and lengthy ordeal, depending on the circumstances.
Note: this will have to happen even if the person dies with a will and/or estate plan. However, chances are that the surviving family member/executor would be much more aware of your wishes, and have a better understanding of what they’re looking for with the assistance of an estate plan.
Then, they’ll need to establish that there is no will or executor named.
Next, they’ll have to organize and account for all documents and assets.
includes bank statements, tax returns, property deeds, retirement accounts, benefits documentation, debt documentation, insurance documentation, etc.
if you don’t have an estate plan in place, there is no way for your surviving family members to be certain that everything has been accounted for outside of a trial-and-error process.
Depending on the circumstances, they might need to quickly initiate the probate process (within a certain period of time)
usually has to be done within a certain amount of time, although an extension can be requested from the IRS.
Finally, they’ll be required to fulfill probate duties and formally close the estate.
The IRS has a fairly simple resource guide on managing a deceased person’s tax responsibilities.
If, at this point, other accounts or assets are located, the probate process will have to start over. Which means more time, resources, and possible legal fees.
This does not include funerary and any other end-of-life care responsibilities. Not to mention the mental and emotional toll of losing a loved one. It doesn’t take much to realize how intense this situation can be when no will or estate plan is in place. Having an estate plan of any kind, including a comprehensive inventory and account information can ease the burden exponentially for your loved ones.
I help you plan today, so you’ll have peace of mind tomorrow.
Probate Takes Time
Note that in Louisiana law, ‘probate’ is referred to as ‘succession’. To avoid confusion with either term, I’ve decided to discuss the legal process with the term ‘probate.’
When you’re watching these TV shows or movies, it also might seem like assets get distributed really fast. So-and-so gets this, so-and-so gets that, and - voila! - it’s done.
But, that is almost never the case.
There’s a multi-step, and sometimes very lengthy, probate process that happens after someone dies.
First, the will must be located.
If there is an executor, this person will contact legal representatives who will then send out a copy of the will to all beneficiaries - according to the most updated estate plan.
Next, the probate process begins when the executor files the will with the probate court.
The court will then determine if the will is valid, and will determine if there are any outstanding debts that need to be paid. (So, any mortgages, loans, or child support payments.) These debts will need to be paid in order for the estate to be settled.
Once settled, any listed assets will be dispensed to the beneficiaries.
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As you can imagine, the probate process takes time, even if you have everything organized and up to date.
If you haven’t named an executor, don’t have the will in a known location, or haven’t prepared the documents correctly with legal representation, the probate process can drag on for much longer than expected. Essentially, surviving family members will need to ask the probate court for permission before making claim or finalizing any part of the estate.
Not to mention that, if you don’t have a will at all, the state will appoint an administrator to take control of your assets (typically a family member who has petitioned the court to be appointed administrator).
Ultimately, without an updated and accurate estate plan in place, state law will decide what happens to your property.
Remember, if someone dies without a will or without an updated will, the state will decide how to settle the estate.
Estate Planning is hard work, but it’s easier than the alternative.
I collaborate with forward-thinking professionals on ways to preserve their property and pass their values and prosperity to the next generation.
Not only will your finances be squared away, but you’ll be better informed on how to have these difficult conversations with your loved ones.
Estate planning is way more than a will, so it might be best for your to work with a lawyer to make sure it’s done well and done right.
Want to know more about being the executor of a will? Check out my step-by-step guide to being an executor here.
Take Care,
Addie Prewitt
FAQ
Q: What do I need to consider when determining if my estate plan is up-to-date?
A: Keep the following in mind when updating your estate plan:
Do I have accurate mailing addresses for beneficiaries?
Have I included accurate phone numbers for beneficiaries?
Is there an up-to-date inventory of properties? (Think: Did I buy/sell a property?)
Did I include an up-to-date list of your beneficiaries? (Think: did my spouse pass away? did I get remarried? did my kid get married?)
Have I changed in estate planning goals? (Think: did I sell my business? did I sell stocks? did I have a grandkid? did new legislation pass?)
Do I have an accurate and timely assignment of roles (is my executor an aging spouse? did my executor pass away? have I lost contact with my named executor?)
Q: Which documents will I likely need to create a well-prepared estate plan?
A: It can vary from client to client, but generally, folks looking to make an estate plan can count on needing some, if not all, of the following documents:
Last will and testament
Living trust
Beneficiary designations
Advance healthcare directive/healthcare power of attorney
Financial power of attorney
Insurance policies (health, life, car, home, etc.)
Proof of identity (social security card, prenup agreement, birth/marriage/divorce certificates, etc)
Titles and property deeds (car, home, boat, rental property)
Digital logins and passwords (yes, all of them)
Funerary instructions
Q: Where can I find out more about the executor role?
A: If you’ve been named the executor of a will in Louisiana, check out my blog post about preparing yourself and your loved ones to be an executor in Louisiana.
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