Estate planning is full oftwists and turns as there are many moving parts that change over time. And whenmanaging these changes between all moving parts involved, one must be sure tomind the details â€¦or else suffer the consequences.
A recent article in AdvisorOne provides a good reminder ofthe need to take care of the details when constructing your estate plan. Thearticle, titled â€œTrusts and LLCs: Smart Ways to TransferWealth and Risk, but Mind the Details,â€ uses the example of trusts andLLCs to illustrate how even the best intended planning can go astray. Thesecommon entities are often used by estate planning attorneys to protect clientassets from probate and creditors, and they are also used to transfer theassets to loved ones after death.
Unfortunately, unless the assetsare properly retitled, the full benefit of the planning may not be realized. Inaddition, unless various insurance carriers are notified that the trust or LLCis now under a new owner (or additional insured), there may be challenges inthe event of a future claim. Example: if the family home is transferred into aQualified Personal Residence Trust (QPRT), but the property casualty policy isnot updated to reflect this transfer.
Insurance is underwritten withthe listed owner in mind. If you transfer an insured asset to a legal entity,then you might invalidate the insurance coverage.
The above-mentioned article is a good reminder thatestate planning is never a â€œone and doneâ€ deal, and it is definitely not
"do it yourself". Maybe this is a good time toreview your assets, estate planning and insurance coverage by scheduling a consultation with us today. Good planning is no accident.