Prevention of Problems is what Gives Peace of Mind
An ounce of prevention is worth a pound of cure, right? Someone famous said that and it speaks to the value of preventing problems before they occur. In the context of medicine, preventative measures include getting flu shots, having regular checkups and screenings, exercising regularly and eating right. In the context of estate planning, preventing known problems is the task in any event. No one really wants their family to have to go through any legal process, whether it be guardianship, conservatorship, formal probate, or some other costly event…if it can be avoided. The good news is that it is relatively easy to avoid all kinds of problems with some advance planning.
Other than wills, trusts and powers of attorney, we often use an agreement not to alter the plan to confer added protections to the ultimate disposition of assets.
Let’s say Jack and Theresa have one child named Sue and they really do not like Sue’s husband and they want to make certain that Sue will receive everything with minimal court involvement but in a manner that will guarantee Sam will not get the control of the money, nor will he benefit. Sam and Sue have a daughter named Valerie. Jack and Theresa want to ensure Sue benefits, Sam does not, and Valerie is the ultimate recipient of what is not used by Sue.
This is not difficult: Jack and Theresa would have basic documents spelling out the above…using revocable trusts to avoid unnecessary probate and spelling out trust terms to guarantee objectives will be met. The agreement not to alter the plan would create equitable rights in Sue and Valerie. It would give Sue, for instance, the right to challenge any legal document that was inconsistent with Jack and Theresa’s legal structure at the time they signed the agreement not to alter the plan. Legal protection is a good thing if it is done in advance. An ounce of prevention is worth a lot. The peace of mind is an added benefit.
Mark F. Winn, J.D., Master of Laws, LL.M. in Estate Planning, is a local tax, asset protection and estate planning attorney.