That’s a great idea. There are some people that grew up in a life of privacy and secrecy, and they don’t like to talk about finances and their situation in life. We honor that, and we respect that. At the same time we also encourage them to discuss these things with their children, their partners and their loved ones, and the reason is so that everybody is on the same page, knows there won’t be any surprises and avoids less fighting. Even if there is some acrimony that exists in the family, I would recommend that during the Christmas or Thanksgiving season or a birthday, after the party is over, maybe have a few minutes where you just sit down and say, “I need to tell you what we are doing with our estate plan. We have attorney, and this is what we are doing with our assets.” if they could tell everybody, that really helps because in that way, there are no surprises. One of the reasons some children fight is because they didn’t know that somebody was going to be left in charge, or they didn’t know that somebody was going to be getting more than somebody else, and those types of things can hurt, especially when a loved one has passed away. It’s always best to discuss those things openly, frankly and honestly so that everybody is on the same page.
Do Your Clients Have A Provision For Mediation Should There Be Any Dispute Among The Heirs?
Yes. We give them the option. We ask them, of course, because it’s their choice, but we prefer them to go through mediation rather than straight to court because it’s more cost-effective, cheaper and usually gets a better result. They get a result that can be completely different than what a court is enabled to do. So we like to have those mediation provisions in there. We don’t like arbitration because it’s similar to a self-funded court and is very expensive, so it can cost the estate thousands and thousands of dollars. However, some of our clients like arbitration because it can be confidential and private, and they don’t want their names and assets becoming known to the public, which would happen if a lawsuit were filed.
For some of our clients who are concerned about privacy, in particular, we put in not only mediation provisions but arbitration provisions to protect their privacy.
Is A Business Succession Plan Integrated Into An Estate Plan Or Is It Something Different?
It is something that is different. We want to understand what it is, and we want to understand what is going to happen. When we talk about a business succession plan, it really depends on what the business looks like, whether it is a partnership, a corporation or a limited liability company. Are there other owners of the business or is it just a family-owned business? Who owns the stock? Who are the partners? How is it structured?
We need to know that because if it is truly a family-owned business, then it can be completely incorporated into the estate plan due to the family component; but if there are other partners or owners that aren’t members of the family, we need to take a step back and keep that very separate. We would need to reference it in the estate plan so there is no question what happens if someone were to pass away. It’s definitely an integrated document: it’s very essential and important, and it should never be left out if there is a business. At the same time, it doesn’t become part of that estate plan; it simply becomes an appendage to it or a reference to it as we create an estate plan for our clients.
How Is An Estate Plan Made Official?
The estate plan is made official when we do what’s called a signing. After all the documents have been drafted, we have our clients come in, and we go over the estate plan with them. We show them the key provisions, and we have them sign it. It’s not only signed: it’s witnessed so there is somebody in the room who is not a party, who is over 18 and can witness the signing. We also have a notary public there, who will notarize that the signatures were signed openly, voluntarily and knowingly. That’s how it becomes set in stone. Once the signing is done, not all the work is done. The next step is to do the funding.
Funding is where we actually put assets into a trust, for example, when we actually implement an estate plan. We put that into effect so that it becomes an actual living, breathing estate plan, not just something that is put into a file drawer and forgotten until you die.
Can I Modify My Estate Plan At Any Time?
It depends on the kind of estate plan that you have in place. There are certain trusts that are irrevocable, meaning that we can’t revoke them or change them once they are put into place. There are some types of estate planning that we do where it is very difficult to change parts of it. The main essential document is either a will or a trust and also powers of attorney. While you are alive, for a revocable living trust, you can revoke it, change it or amend it. If you are a couple and both settlors or trustors of the trust, then you both have to agree and sign off on any changes in the trust.
A will is individual; and while you are alive, you can always do what’s called a codicil, which is an amendment to a will, or you can cancel or revoke that will and put a new will in its place. This is the same with powers of attorney: you can cancel or revoke those powers of attorney and put new ones in place, or you can change them at any time while you are alive and capable of making those decisions, meaning you have your wits about you, your mind is functioning properly, and you haven’t been declared incompetent by a doctor.
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8833 S. Redwood Road, Suite C
West Jordan, Utah 84088
Telephone: (801) 676-5506