HomePrivate WealthArticlesWhen The Perfect Estate Plan Isn’t Perfect

When The Perfect Estate Plan Isn’t Perfect

Do you have an estate plan?

If so, how sure are you that it will deliver the results you want?

If you’re confident it will deliver the desired results, how sure are you that it is doing so cost-effectively?

The wealthy and successful have often told us their estate plans are all set. They just updated them, or, in one case, it was perfect. The complication is that many estate plans are far from perfect. And the perfect estate plan turned out to be a complete mess. Many estate plans do not produce the results desired by the families. More telling is that a large percentage of the families believe their estate plans will deliver the results they want will not do so.

“We’re finding that for a good number of our clients, their estate plans have not been looked at for quite a while,” says Donna Feder, CPA, EA, partner in charge of the LA region for Duffy Kruspodin. “Usually, we find their estate plans are out of date. Their life as changed, or tax laws have changed, and their estate plans have not taken these changes into account. Another reason for less effective estate plans is failing to take advantage of all the financial products available. This is more common than most people realize, which leads to technically inaccurate and ineffective estate plans.”

Compounding the issue is that for many successful and wealthy clients, it can be a mistake for estate planning to be just about transferring existing and projected assets to future generations. Regarding accomplished business owners, optimal estate planning is integrated with other forms of wealth planning, such as succession or exit planning, asset protection planning and charitable giving. When doing estate planning, it is essential to take a holistic approach to maximize the value. 

As noted, the complication is that a large percentage of the wealthy and successful think that the matter has been taken care of when they’ve done their estate planning. An excellent way to confirm that your estate plan is done well and will produce the results you want cost-effectively is to get a second opinion.

“For many successful and wealthy individuals and families, we regularly provide a second opinion on their estate plans,” explains Homer Smith, director of the DK Family Office Practice and co-author of Making Smart Decisions: How Ultra-Wealth Families Get Superior Wealth Planning Results, “We often find that the estate plans are well done and achieve clients’ agendas. Sometimes, there are gaps and refinements that make estate plans more efficient and cost-effective. In these situations, we’ll explain the fixes the clients can take, which entails making a few adjustments but nothing major. Now and again, we find the estate plans ineffectual and help the clients revise their estate plans.”

If you don’t have an estate plan, you might want to seriously consider getting one. If you have an estate plan and you’re not entirely sure it will do what you want, you might consider getting a second opinion.

Russ Alan Prince is the executive director of Private Wealth magazine and chief content officer for High-Net-Worth Genius. He consults with family offices, the wealthy, fast-tracking entrepreneurs and select professionals.


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