A properly and professionally written estate plan consisting of the pertinent documents specific to your financial and health situation is critical for every family. Many people like to get an estate plan made, sign it, lock it away and forget about it for years or even decades. This is far from the best strategy. Not only in light of important life events, but also because of ever changing tax and healthcare laws.
What documents Should Be Part of an Estate Plan?
There are several estate planning documents that comprise a complete estate plan. This list is not exhaustive, but your estate planning documentation may include:
- Last will and testament
- Living will
- Revocable Living Trust
- Healthcare Directive
- Power of Attorney
- Any other documents that have named beneficiaries
What Qualifies as a Life Event?
It is important to think of your estate plan as constantly evolving as you experience important life events. These life events may require a revision of your estate plan. You may ask. What qualifies as a “life event?” Life events may be:
- Marriage or divorce
- The birth of a child or grandchild
- A purchase of a home
- Moving out-of-state
- A death in the family
- Career changes
- When you receive an inheritance or significant asset
- And more
Tax and Healthcare Law Changes
Tax and healthcare laws are continually changing and it is advisable to have your estate plan updated to to reflect any of those tax and healthcare law changes. A good estate attorney will inform you of them. Still, you should occasionally check in with your estate planning attorney and ask if there have been any changes that you need to address with document updates.
Health Changes
A significant decline in an individual's health or a terminal diagnosis is a critical time to review and update your estate planning documents. You will want to ensure that your estate documents reflect your wishes for who will inherit your property and assets when the time comes. It will ease any worries you might have about leaving your loved ones with the burden of handling your estate after you’re gone.
Why Reviewing Your Estate Plan is Important
These are all examples of life events and law changes that should make you pause and review your estate plan. Any large life or law changes will have a direct impact on your estate plan, and sometimes for reasons you may not even be aware of. When these occur, it is best to consult with your estate planning attorney for the best plan of action. If nothing significant has happened such as the birth of a child, divorce, marriage, death of a family member, change in jobs, or change in your balance sheet or assets, then a good benchmark for reviewing your estate plan is every 3 to 5 years.
How to Review Your Estate Plan
Reviewing your estate plan consists of sitting down with your attorney and walking through your goals and objectives in light of your new situation. Analyze whether your current documents achieve those goals. Determine whether your property will still go where you intended and your insurance is in place to protect your loved ones. Ensure the titles on your assets and the beneficiaries are optimized. You may find that you need to change certain provisions like updating the executor, the guardians, changing the order of the trustees, changing titles to assets, naming beneficiaries, implementing tax planning to minimize estate taxes, or taking other steps to avoid probate.
Life is dynamic and ever changing. If you have not reviewed your estate plan in a while, it may be time to seek counsel from your attorney to ensure it is up to date. Whether you need to put a new estate plan into place or review a current plan, we can help. Contact us today.