Disengagement – Threats to your Estate Plan

Tax LawAs in parts one and two of this Estate Planning series, I want to credit James E. Brill and his excellent article, “Discouraging Disengagement.” In Part One, we discussed Death, Disability, and Decline. In Part Two, we looked at Disaffection, Disappearance, and Domestication. In Part Three, we take a brief look at additional threats to your estate plan: Death Taxes, Designations, and Distrust.

Under current law, most of us who live in Texas are not concerned with estate taxes. While there has been concern in the past in other jurisdictions, and probably will be in the future, estate taxes currently do not impact the average Texan. The “Death Tax” we confront on a daily basis is the failure to prepare, safeguard, or adequately maintain documents. Death cuts off the opportunity to prepare and ends our ability to provide guidance to those we trust regarding our wishes for what happens after we are gone. Neither the federal nor state government can cost your estate as much as you can, by failing to prepare for your death and/or disability.

Designations must be updated periodically. The passage of time and the vagaries of life will ruin your plans unless you maintain them. Trusted individuals may die, become disabled, move away, or become so busy with their own responsibilities, that they are no longer good choices to serve as fiduciaries. For example, if I told you the Dallas Cowboys had the same backup quarterback that they had 20 years ago, you wouldn’t believe me. There is a shelf-life for quarterbacks and for executors, trustees, and agents under powers of attorney.

Distrust is also a reason to update your plan. It may be that the person you chose as a beneficiary or fiduciary has made some bad choices. Perhaps they are involved with people or habits that cause you concern as to their reliability. It doesn’t have to be sinister to be of concern. A beneficiary who has become disabled could forfeit some forms of assistance without careful planning. Perhaps new relationships and responsibilities have altered a fiduciary’s suitability to serve?

You don’t have to know all the answers for your estate plan, but you do need to prepare. Schedule a consultation with Bailey & Galyen’s Estate Planning attorney, Jay Bailey, who has been helping people for more than 30 years and is available to help you!