Failure to Create and Regularly Update an Estate Plan.
Eric and his wife, Joyce, met with an estate planning attorney to set up an estate plan tailored to their needs. Eric named Joyce as his sole heir, and she returned the favor.
Eric and Joyce had always argued, but wasn’t that true of all couples? Still, Eric was taken back when Joyce stormed out of the home two years later after one of their spats and did not return. A few days later, a man came to Eric’s home and served him with divorce papers.
The divorce was long and bitter. Fortunately, they did not have any children, so they were not fighting over custody and visitation, but the property settlement was difficult. Eventually, Eric traded his interest in their home and in some stocks so that he could keep his business.
Eric worked hard, and his business flourished. He had no plans for marrying again, but changed his mind when he met Hilda. They immediately fell in love, and, a few months later, were married. And guess what? They didn’t argue. Eric had never been happier.
With Hilda’s support, the business grew as never before. Over the next eight years, three children joined their family.
Shortly after their 10th anniversary, Eric was killed in an accident. Family and friends rallied to support Hilda and the children. Even Joyce attended the funeral and expressed her condolences.
A few weeks after the funeral, Joyce’s attorney sent Hilda a letter asserting that since Eric had never updated his estate plan, Joyce was his sole heir.
How to Avoid Mistake #7
As the old saying goes, nothing is certain but death and taxes. And if you don’t have an appropriate estate plan, your heirs will pay unnecessary taxes when you die. Further, your heirs may be forced to sell your business if you have not coordinated your estate plan with your buy-sell agreement.
If you own a business, you must have an estate plan that is tailored to meet your specific needs. Regularly review and update that estate plan to make sure it is still applicable. If you experience any major life changes – marriage, divorce, birth of a child, or death of a spouse or child – update your estate plan immediately. If you don’t your estate may not end up where you want it to go.
If you have further business related questions, please call our office at 480-733-6800 and ask to speak with Scott Gibson. Scott, an AV rated attorney, handles employment law, trade secrets and restrictive covenants, commercial litigation and intellectual property. He brings with him 27 years of experience and a unique combination of compassion, patience, intelligence, listening ability and commitment.