Estate planning is not a once-in-a-lifetime, “set it and forget it” item to check off your to-do list. (But wouldn’t it be nice if it was?) In one way or another, your life is going to change as you age, and so is the law. A variety of events can affect your estate plan, some that are obvious like births, marriages, and divorces, and some that are not so obvious, such as moving states or celebrating a birthday.
Below are seven common events that can affect your estate plan and why you should contact your estate planning attorney when they do.
- You’ve had a birthday.
Not just any birthday – but a milestone birthday that prompts you to more deeply contemplate your future and what outcomes you envision for yourself and your loved ones. Any time you’re reflecting on and possibly changing course on the kind of future you want for your family or loved ones, revisit your estate plan. Make sure your current preferences are adequately enshrined in your plan.
For example, it’s not uncommon for parents to select a guardian when their children are very young, and then forget to update their plan until their children are off to college. Family relationships can change and friendships can fade. A guardian you chose when your children were in diapers may not have been the guardian you would want when they’re tweens and teens.
Regularly checking in on your plan ensures your trustees, guardians, etc. make sense for your family now.
- You’ve bought real estate or you’ve had another major change in your asset picture or financial status.
Any time your asset picture changes is a good time to check in with your estate planning attorney. Did you buy a vacation home or inherit large assets that should be added into a trust? Maybe you’ve had a successful business venture that increased your net worth. Any number of changes can affect your financial status and your estate plan should reflect that.
- You’ve had another child or a fiduciary has passed away.
If you’ve had a child since you last updated your estate plan, a well-drafted estate plan will cover future-born children – but it’s always a good idea to have a quick check-in with your attorney to be certain.
If a beneficiary or fiduciary named in your estate plan has died, you’ll need to update your plan to remove the deceased person’s name. If you don’t, you’ll make it harder for your Personal Representative or Successor Trustee in the future, as they’ll have to track down an original death certificate for that person to proceed.
This can become time consuming and costly. If your spouse has died, your plan may need an entirely new structure.
- You’ve gotten married or divorced.
A change in your marital status will require significant changes to your estate plan. If you’ve recently married, then a whole new set of gift and estate tax planning opportunities have become available to you and your new spouse. Some of these new options will depend on where you live and where you own real estate.
Or, if you’ve recently divorced, your estate plan should be updated to insure that your former spouse is removed as a beneficiary and fiduciary and you’ll also need to update the beneficiary designations for your life insurance and retirement plans, including IRAs and 401(k)s to ensure that your spouse is removed from all assets.
- You’ve started, purchased, or sold a business.
If you have recently started or purchased a business, you should meet with your estate planning attorney to ensure that your estate plan is structured properly to deal with the business if you become disabled or die. You’ll also want to put together a comprehensive business exit plan.
On the other hand, if you’ve recently sold a business, your attorney can help you ensure that your plan is properly structured now that you don’t own a business, that the sale proceeds are titled in the name of your trust if you have one, and determine if your estate is no longer, or has become, taxable. If it has become taxable, then you’ll need to figure out how the taxes will be paid as well as identify ways to minimize the estate tax bill.
- You’ve moved to a new state.
Moving to a new state is one of the most important reasons to update your estate plan by meeting with an estate planning attorney in your new state. Why? Because state laws dictate what estate planning documents need to include and how they need to be signed. Though your estate plan would have worked well in your old state, it could be declared ineffective or simply invalid in your new state because of one wrong provision or one missing signature.
Aside from this, moving from a state that imposes an estate tax to one that doesn’t, or vice versa, means your plan will need to be updated to reflect this change in the taxable status of your estate. Or if you’ve moved to or from a community property state, this can affect your estate plan significantly in ways you don’t intend. Either way, an estate planning attorney can ensure all is above board and best protects your estate and wishes.
- A beneficiary or fiduciary has gotten married or divorced.
If you’ve selected a married couple to serve as guardians for your children and they later get divorced, you should update your estate plan as soon as possible in light of this change. Or if a couple is named anywhere throughout your estate plan to serve together, such as in the role of Successor Trustees, then their divorce necessitates an update to your estate plan.
It’s important to keep in touch with your fiduciaries so you know about changes in their lives that may change your preferences about what your estate plan dictates for the future of your family and loved ones.
Life moves fast and change is constant. Wills & Wellness can help your estate plan keep up.
Our experienced attorneys can review your current estate plan and ensure it still meets your needs.
Contact us today for a consultation.
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