A lesson in the importance of periodically updating estate plans

A proactive approach to estate planning can consider various life contingencies, yet the future is ultimately unknowable. For example, a lot can change between an individual's mid-life career and retirement. If retirement accounts are not updated to reflect current beneficiaries, there may be unintended consequences once the original account holder reaches retirement age and begins taking required distributions.

To avoid surprises, it is a good idea to update one's estate plan periodically and after significant life events. Such events might be the illness or disability of a spouse or other loved one, purchasing a large asset, taking on unexpected debt, or career changes.

An attorney that focuses on wills and trusts can suggest efficient ways to ensure that an estate plan still reflects the intentions of its grantor. For example, it may not always be necessary to amend a trust. If a grantor has acquired new assets, an attorney can change the ownership to assets retitled in the name of the trust.

In the celebrity example of Farrah Fawcett, a recent article profiled the revocable living trust created by the actress to manage her estate. The largest portion of the estate went to a charitable foundation devoted to cancer research. The trust also created funds for the support of Fawcett's son and father, and further bequeathed all of her artwork to her alma mater, the University of Texas.

However, a dispute arose when Ryan O'Neal, Fawcett's former boyfriend and the father of her son, claimed that he owned one of Fawcett's portraits, painted by Andy Warhol and valued at around twelve million dollars. Fawcett's trust had not been updated to specifically itemize all of the artwork, so the dispute eventually went before a jury, which ultimately ruled for O'Neal.

Source: Reelz, "Celebrity Legacies: Farrah Fawcett," Danielle and Andy Mayoras, Feb. 6, 2015