Will might need adjusting
LEGAL | It would be a mistake to forget about this important document
A client (let's call him Harry) moved assets to us a few years back because he was unhappy with his investment adviser. That adviser had invested most of his money into expensive investment products, which not only performed poorly but carried hefty back-end fees preventing him from changing out of them.
After years of discontent, the client is now pleased with his results.
But Harry called a few weeks back in a panic. Upon reviewing his will, he discovered that the old adviser -- whom he neither likes nor trusts -- was listed as manager of his family assets after Harry passes away. He had completely forgotten about that passage in his will.
Thankfully, Harry's story ends happily, because he caught the mistake, and changed his will to specify that his current adviser should be manager.
Yet there are too many similar stories with unhappy endings.
Another client suffered through a difficult divorce and, despite years of haggling over assets with his ex-wife and her attorneys, hadn't arrived at a financial settlement. He didn't think it fair that she should get half of everything. But he fell ill and died without ever changing his will, so she got it all. Great for her, but by no means what he had intended.
As a portfolio manager and investment adviser, I urge clients to review their investments and estate planning documents at least annually -- or whenever an important family life-change occurs.
Has someone fallen ill recently, or is someone showing signs of dementia? What if they have power of attorney or are listed as caregivers to your children?
Wills and other estate planning tools, such as trusts, are powerful instruments used to control what happens to your belongings and loved ones when you die. They can help protect wealth by reducing the tax burden. They can help ensure money for education for generations. They can provide income for your loved ones and gifts to your favorite charities. And they can help your family avoid the probate process.
But wills do not evolve as your life changes, which is why it's crucial to re-read them periodically.
Remember that if there is any serious change in your life, it might bring about the need for immediate revisions.
J. Bryant Evans is a portfolio manager and investment adviser with Cozad Asset Management of Champaign. He can be reached at bryant@cozadassetmgmt.com.