Is Your Client Giving a Trick or a Treat?

What Happens If Asset Ownership Does Not Match an Estate Plan?

Has your client been lulled into a false sense of security because they have “done” their estate plans? Unfortunately, a threat to your clients’ estate plans may be lurking in the shadows, if the way your client owns their property is inconsistent with their estate plan. This could end up making their estate plan a meaningless relic. How can you help your clients defeat this peril, so that their estate plan will work the way they anticipate when the time comes?

First, take time to either review your client’s estate plan yourself or have your client explain what their estate plan entails, including whether it is will-based or trust-based. This will help reaffirm your understanding of what your client’s estate plan is and identify gaps in your client’s estate plan and their knowledge of their estate plan. Differentiating between a will, trust, and other estate planning documents may seem straightforward and commonplace to you, but for clients who do not deal with these documents regularly, it can be confusing. Do not hesitate to walk your client through a refresher course on their estate plan or encourage them to do so with an experienced estate planning attorney.

Next, review account ownership to ensure that all of your client’s accounts and property are correctly titled. If something is supposed to be part of their trust at their death, is it owned by the trust or is the trust named as the beneficiary? Or, if the account or piece of property is supposed to be controlled by a will, is the account or piece of property owned solely by the client, or is there a co-owner that will automatically inherit the client’s interest? Many clients do not thoroughly understand that how they own their money and property will determine whether their will or trust, or neither, controls who will receive the money and property. You can educate your client so that they understand that, regardless of what their will or trust may say, the terms of those documents will not apply if the client or trust does not hold title to the property properly.

As their trusted advisor, you can help your clients avoid giving their loved ones a trick when they intend to give them a treat by ensuring that their account and property ownership matches their estate plans, so that they will work the way clients expect when the time comes.