Ep #152 - Your Estate Plan May Need A Refresh. Here's Why

[00:00:00] Ben Haas: Hi everyone, and welcome to AB Conversations, where we will help you CFP your way out of it. A podcast where you get into the minds of a couple certified financial planners on how we think and feel about everyday financial planning questions, and what should really matter most to you. A healthier financial life starts now. 

[00:00:27] Ben Haas: So when we're talking planning, usually the last thing that we get to, unless it's their fire we want to go through the process of making sure an estate plan is complete, right? And when we say complete, even when we ask people though, we like to think that yes, we've checked that box, it's finished. 

But in reality, things change in life, right? It's an estate plan is something people need to maintain, right? As their life, as laws, assets, relationships change. This episode, we wanna really focus on not just, Hey, did you get this done? But for you to start thinking about your estate plan as a living very human document, not just a legal one. 

[00:01:06] Adam Werner: Yeah, exactly. And we, I mean, we see it all the time, right? We ask new people coming in you know, to our business that is, you know, do you have your estate documents done? And we often get the answer yes. Then the natural follow up. When was the last time they were reviewed, or maybe, you know, when were they created? 

And then we come to find out, well, that might've been, you know, 20, 30 years ago when the kids were little, we set it up, right? So, yeah, it's, it makes it very easy to say, yes, we check the box, but as we know, things change over time and we would just wanna make sure that it's still accurate and still reflects their situation. 

[00:01:46] Ben Haas: Yeah, I think we can confidently say, which is why we're throwing this out there today. Even if you have one, you may need to refresh it. Estate plans don't fail. For some people, if you don't have the documents, right, the estate plan's gonna fail. But if you do have the documents, you're still susceptible to things, right? 

If they are outdated, if things are misaligned to the people, places, and things that matter most to you, and if they're just disconnected from the reality of how things may get settled or how the people in your life will feel emotionally about how they're settled. So let's go through it. Yeah. You know, no better time than the present for maybe a quick refresh. Let's go through some of those things that would absolutely necessitate. Let's just say a review, like a good conversation.  

[00:02:29] Adam Werner: Yeah. The easiest one, I think right off the top is just any change in life, right? Retirement being a big kind of transition. You know, if I owned a business, did I sell that business at some point, or do I still control an interest there that I need to factor in to any estate planning, you know, later in life? 

Kids, grandkids, deaths, remarriages. Mm-hmm. All of these family things are just, you know, the life changes that just happen over time. They need to be addressed, right? This isn't one of those things that we just set it and forget it. Those what may feel like minor changes can have hugely impactful, you know, domino effects later in life if it's never reviewed. 

It can have those unintended consequences that we would just want people to be able to avoid. 

[00:03:18] Ben Haas: Yeah. So let's start with maybe some examples, and it's not to scare people into activity here, but if that's the outcome, maybe that's still a good thing, right? A client calls, calls yesterday, sadly, her daughter's getting a divorce. 

I can, in my own head now think about, well, how were certain things titled all the way down to, God forbid something happens to their daughter before something happens to them. Where is that money and would they want the children's father to be involved in overseeing that or is there some other way of setting that up? 

That's a very common case of relationships have now changed. Mm-hmm. This is sadly more common than, you know, people would want it to be on the day you say I do. But this is the reality. That's a very common case where things may be now misaligned. 

[00:04:02] Adam Werner: Well, and not only that, I feel like I can't even count the number of times we hear from clients with adult children, that is, you know, this child is doing okay, they're doing better than we ever did at that age, but this other child may need a little bit more, you know, support than the other. 

So the R saying, or the saying of fair is not always equal and equal is not always fair. Right? When these documents may have been written when the children were minors. Everything gets split equally. Does that still reflect what the parents would want in that situation? Flash forward, you know, 20, 30 years into the future, maybe not that's not an uncommon conversation for us to have. 

[00:04:41] Ben Haas: Or let's go to the next one. So then maybe a trust is set up if that's either to protect a child from something, right, the responsibility of an inheritance or, you know, we had situation where there, there are clients that have special needs trusts for kids that, you know, whether it's for governmental assistance or again to protect themselves from finances that they may not be able to keep. Great, that trust was set up. But now is every financial account you have listing that trust as a beneficiary or not. Yeah. And if those are not updated right now, we found a leak. A leak in the ship here that could, you know, sink it. 

[00:05:19] Adam Werner: I think so. Even just to that end, I think when we say estate planning, it's not just the documents. 

It's not just, you know, the will, but it is making sure that the beneficiary designations are also either aligned to that or it's just crystal clear that these things can work independently where your beneficiary designation is going to supersede whatever it says in the will. So to your point, when there are more complex situations, you just want to be a hundred percent certain that if I'm not here tomorrow, that everything's gonna go the way that I think it should go. 

[00:05:58] Ben Haas: I think I'll maybe pivot. Again, there are a lot of life changes that can happen. There are a lot of asset changes that happen, you know, for you using the example, Hey we did the right thing. We set up this will when our kids were minors, now we're retired. Or maybe we've been in retirement for a little bit. 

Now these, you know, these retirement accounts are bigger. Now we've got different types of accounts. You know, like we said, maybe more complex beneficiary setups. As your assets change. I'll give one very quick story and then, you know, you can jump into whatever point you wanna make here. We have a client that very intentionally reviews this every year, right? 

And if she's got, I'm not gonna exaggerate a dozen different types of accounts or things that make up her estate, she probably has more than a dozen different institutions, people place things that matter to her, where every January, like I owe her this document, like yesterday. Every January we go through that process of, well, let's just see what the actual value of these things are and what percentage to what beneficiary, how does that actually shake out as a dollar amount? 

Right. And for most people, you know, assets have really, the market has really done well these last couple years. You may think, Hey, well this person's getting a 10% piece of my estate, 10% doesn't sound like a lot, but maybe from a dollar standpoint it is. You know, it just gives, that gives her the ability to reflect on that and be very intentional. 

Right. Assets change over time. Yeah. 

[00:07:22] Adam Werner: Absolutely. And the other part of it too is what changes over time as we've seen, the rules around certain accounts or just the tax changes that we see, what feels like every few years. So we don't need to get into the nitty gritty details of, you know, what could have changed over time. 

But the point is those tax rules change over time and that can impact how you may want to leave things to kids or grandkids or to charity. You name it. Just those changes that again, just, yes, the document is done. Let me check that box. But if somebody did their estate plan 30 years ago, the tax code has probably changed nine times, eight times, something like that over that time period. 

So you would just, again, I'm gonna sound like a broken record, we just want to be sure that with all of these potential changes over the course of somebody's life, right? It's the three, it's what has changed in my life? What are my assets doing? Or you know, why my financial changes? But then it's the tax changes on top of that. 

So you put all of those three things together, it can take you in so many different directions. 

[00:08:29] Ben Haas: So then let's get very practical, very real here. I know I probably jumped to some of this when we were just talking about the reasons to consider, you know, reviewing these things or the changes in your life. 

But let's go through like the things we often come across that are just wrong. And I'll start because I kind of went there a little early. Just beneficiaries that no longer make sense. Right. Yeah. I will forever remember the story. I couldn't have been in the business for more than two or three years. 

I hope these people are still alive and well. But at that time I, I came to meet them because they went through tragedy. Their son had passed away. Freak accident. Right? Was young at life. I believe he was only in his forties, not married, had a sizable 401k 'cause he had just been working and stashing it away. 

The beneficiary of that 401k was an ex-girlfriend who we had not been with for more than 10 years. Right. Wow. And I don't even know how that all shaked out other than to tell you listening audience. Right. By law she inherited that money. So I realize that's a horrible case, but whether it is again, ex-spouses, splits in relationship, you had mentioned the kids are now adults, special needs situations, you really need to account for all of this, and we will often see, even for our own clients, right? 

We want to go through the process as often as we can of just going, Hey, does this still look okay? Hey, you had a, you had another grandchild. Right? If we were listing them individually, we don't want one, one now excluded. Right? It's just a good practice. 

[00:09:56] Adam Werner: Yep. Yeah, exactly. And that's just on the beneficiary side. Then you take that one step further, you know, who am I naming in my estate documents as my executor, or my power of attorney or the trustee of a trust, right? Those can change over time. Where we often see that is, you know, for some older individuals that maybe don't have the kids or grandkids or somebody obvious to name, they're naming siblings or spouses or friends or other people their age and time is not promised, right? We've run into many scenarios where the people that are named to carry out a document or essentially execute somebody's will, they're no longer here. So having not only contingents or again, just making sure that if something happened to me yesterday, does everything I have listed in this document still apply. And the people who are in line to execute on a document like that, making sure they're still alive, but also willing, right? 

They have to be able to step into that role. And sometimes, the most normal thing we see is for a couple who has children, they often name the oldest child as an executive. 

[00:11:09] Ben Haas: Yeah. Right. 

[00:11:11] Adam Werner: That's the default, but that doesn't necessarily mean they're the most qualified or the, they're the best fit to play that role. 

So sometimes it is bingo. Yeah. Now we are, yeah. Now we're in retirement. Kids are grown. Would I want to make a change? Is there somebody who may be able to fill this role better than another and not necessarily just stick to the default, because that's the default. 

[00:11:34] Ben Haas: Yeah. Then yes. That's really well said. 

So I'm gonna leave that one alone even though we could be there all day. I was sadly going through, you know, thinking about my own situation. So retirement accounts or financial accounts and the estate plan, right? We need people to remember that these are two different things. So let's say you do up update your will, you do think about wanting to change the people involved, the persons, the roles, the beneficiaries. 

If the will says one thing and the IRA or the financial account says another. The beneficiary form is going to win. That supersedes the will. So mm-hmm. We will see this, and I know you kind of opened the podcast with this, Hey did you get this done? People proudly say yes. Well, there is that second step, right? 

If these things are to match, then it is going to every financial account, institution that you have and making sure that is updated as well. 

[00:12:26] Adam Werner: Yeah, and I think often when we think about estate planning the first thing that comes to mind is when I'm not here, what does my will essentially make happen? 

But that's only one possible scenario. Right? We don't have a ton of experience in here, thank goodness. But it's the plan for incapacitation, right? I'm not just completely gone. I'm here, but I'm incapacitated. I can't make these decisions anymore. And that's where making sure you have a power of attorney. 

Having a health, a healthcare directive, these things in place that either you've already documented what you would wanna see happen, or again, you're naming somebody to help make those decisions if you can't. And when we think about estate planning, again, I think that default is, well, I have a will, so I'm good. 

But there are some other documents that we would say for sure are absolutely necessary. And it's one of those it's a, it's, oh, what's the saying? It's better to have it and not need it, than to need it and not have it. 

[00:13:23] Ben Haas: Bingo. Yeah. . Maybe piggybacking on that, I think where we also see things, I hate to use the word fail, but things not work. 

Whether that's during life or certainly at death, it's that, okay, you have these instructions, but there also may have been no guidance around those instructions. Right? Documents say what happens, but either not why or the context or I'm starting to think of a, again, a different situation where there may be family heirlooms or you know, precious art, things that have value. And may, maybe this is something that you want passed down to your kids, but they would have no idea how to handle it. Right? Maybe it is, well, if, I don't care if they want to sell it, but if it's fine art, like, how, you know, what do you know? 

Yeah. What is that institutional like knowledge that you have around how this may have been handled while you were alive? I'm just using that as one example, kind of recently popping in my head. But there's two different things at play here. It's the instructions within the documents, but there also should be something often that goes with that, that I love you letter on here's why this matters, or here's how to handle it, or here's where you can find these precious things. 

[00:14:32] Adam Werner: Yeah, so I think that is so, so important. And I certainly that is like we're just kind of digging layer into layer, meaning check the box on those who have estate plan, check the box, you know, go one step further, who has all of the documents go one step further? 

Does it still apply? But then that last part of, but are your, it's not just, are my wishes clearly documented, but to your point it's the emotional side behind it, right? We often hear from people, well, I know my dad said this, that he would have wanted this, but with multiple people involved, maybe they have different recollections of what dad would have wanted in that scenario. 

Having it documented, like you said, yeah, maybe that's not in an official estate document, but it is that I love you letter. Right? When I'm not here's the intent behind I'm naming these people because here's what I want to see happen. I think just that extra level of kind of detail hopefully eliminates potential conflict. 

[00:15:38] Ben Haas: Yeah. Because for a lot of people, and I'll even include myself in this, you know, not as young as I once was. When you're forced to kind of think about this, it can get uncomfortable, right? Nobody seeks out conflict or to be perceived as unfair, especially if there's multiple parties again. 

Mm-hmm. All families have their own dynamics. Thinking about death and even talking about death is just not fun. Mm-hmm. But the reality is, if you don't, these people are still left with that bag to carry. Right? Yeah. So if there can be a way, I realize there's a very human element of this, but if there can be a way to make estate planning, not about feeling like there's right or wrong, or I'm controlling people or I'm not, but just about reducing any confusion or potential conflict that could happen anyway. 

To your point, it's, let's not guess what mom and dad would've said or would've wanted. Let's find a way to have a conversation about it, or at least put something in writing so even if it's not the, what could be awkward in conversation, it's at least something that's on record on what really mattered to you and why. 

[00:16:45] Adam Werner: Very well said. And I think that's where we are trying to play a role for many of our clients and just having that conversation, right? We don't want this whole idea and there's so many reasons why people get to the estate planning stuff last, myself included, like I'll throw myself under the bus. 

It is just it's a it's not a fun topic to kind of think about, but again, it's so, so important. So to take away as like, I have this legal task that I just need to get done and just view it through the lens of this is a conversation. Let, and again, this is where we play this role for our clients, right? 

Let's just have the planning conversation around if something happened to me yesterday, what would happen and does that align with what I would want to see happen? So I think maybe just taking the pressure off of what these feel like, just big heavy conversations and they are but to just take a different approach to just, we don't need to decide everything today, but let's just talk through the different options. 

Let's view this as a planning conversation. And then from there we can decide what needs to change, if anything, and then decide what are those actual, you know, micro steps to enact a change if it's necessary. 

[00:18:00] Ben Haas: Yeah. And we certainly want to be the safe space to start that conversation if you haven't already had it. 

But then maybe the call to action here is if you do have these estate documents, pull 'em out. You know, to your point, look at the dates. Look at the names. You know, ask yourself, are these people still the most important people in my life? 

You know, does this still match what I would want? And if it doesn't, right, you haven't failed, you're still here to go through that exercise and just update it. And if it does fit, then again, we want to help not only then take the next step if you have it, and have the conversations with the people that matter, but know that, you know, at least if you're working with us, we're gonna ask you to review it again. Probably in another year or two or three or whatever it is. 

[00:18:43] Adam Werner: Yeah, I guess the important part of all of this is just that review is just so critical. Just again, to make sure that what you have, if you have it still applies. And if it does, great. Put it back in the box, put it back in the filing cabinet, put it back in the safe, whatever. And yeah, review it again in a couple years and do that in perpetuity. 

If you never need to change it, great. But if and when that time comes, which for many of our clients, it's many. I'm sure it will. Many, yeah. Many times that little things need to be updated. It's better to catch it while you still can than deal with the consequences when you're gone. 

[00:19:20] Ben Haas: Bingo. Thank you, sir. Well said. Okay. 

[00:19:23] Adam Werner: Thank you. 

[00:19:24] Ben Haas: So no time like the present? 

[00:19:25] Adam Werner: Yeah. 

[00:19:26] Ben Haas: 2026. Get that review done. 

[00:19:28] Adam Werner: Rip the bandaid. 

[00:19:30] Ben Haas: See ya. Till next time. 

[00:19:31] Adam Werner: Bye. 

Ben Haas: Hey everyone, Adam and I really appreciate you tuning in. Please note that the opinions we voiced in the show are for general information only, and are not intended to provide specific recommendations for any individual. To determine which strategies or investments may be most appropriate for you, consult with your attorney, your accountant, and financial advisor, or tax advisor prior to making any decisions or investing. Thanks for listening. 

Investment Advice offered through Great ValleyAdvisor Group, a RegisteredInvestment Advisor. Great Valley Advisor Group and Haas Financial Investment Advice offered through Great Valley Advisor Group, a Registered Investment Advisor. GreatValley Advisor Group and Haas Financial Group are separate entities. This is not intended to be used as tax or legal advice. Please consult a tax or legal professional for specific information and advice. are separate entities. This is not intended to be used as tax or legal advice. Please consult a tax or legal professional for specific information and advice. 

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