Your estate plan needs to be refreshed every so often because life's circumstances are always changing. You might be unaware of how much the changes will impact your estate.
From Forbes, we learn that 51% of Americans age 55 – 64 don't have a Will. That's bad news for their families, who will have to deal with the estate plan default: whatever the rules are for their state. But for those who are smart enough to have an estate plan in place, there are still some maintenance issues that need to be addressed with a review every now and then. Everything changes over time, including your personal and financial situations and tax and estate planning laws.
Even if your estate plan was crafted by a skilled and experienced estate planning attorney, you'll want to talk to him or her if any of these things occur:
Marriage or Re-marriage. This doesn't automatically change the provisions of your will or trust and won't necessarily provide for your new spouse. Talk with your attorney to ensure your plan reflects your new goals, both individually and as a couple.
Divorce. After a divorce your goals will probably change and so should your estate plan. When your divorce is finalized, revise your plan as quickly as possible to reflect your new goals and intentions.
Children. When you have a child or adopt, you'll probably want your son or daughter to be the recipient of your estate, and you need to appoint a legal guardian for your child in the event you and your spouse die or are incapacitated.
Injury or Illness. If you (or one of the members of your family) become seriously ill, you may want to consider changing your estate plan to reflect their increased needs. For example, a special needs trust lets you leave assets in a trust that will not disqualify him or her from receiving government benefits.
Change of Plans. With time your goals and intentions naturally change, and your estate plan should reflect your current intentions, not the goals you had five years ago.
You inherit. If you or your spouse expect to get a sizeable inheritance, there may be new opportunities to reduce taxes or provide creditor protection. The increased value of your estate may also mean you change how your assets will be distributed when you die.
Buy or sell a business. If you purchase a business, you may want to create a succession plan. If you sell your business, the capital you receive may require a different plan for asset distribution and reducing the tax burden for your heirs.
Moving to another state. Estate planning documents are generally legal from one jurisdiction to another, but each state has its own laws. If you move from a separate property state (like Virginia) to a community property state (like California), you might want to convert your separate property to community property to take advantage of favorable income tax treatment.
Your best bet? Review your plan with your estate planning attorney every few years to keep up with changes in federal and state laws. If your life experiences any kind of major change as described above, make that appointment today!
Reference: Forbes (January 28, 2016) "8 Reasons to Revise Your Estate Plan Today"
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