When Should We Review Our Estate Plans?
- posted: Jan. 10, 2023
- Estate Planning
The New Year is the time many of us take a fresh look at things and make resolutions. This may be the right time to take a look at your estate plan that is probably gathering dust somewhere in your home office. The question becomes, when and why should I take it out and look it over? This newsletter is designed to give you some guidance on some of the reasons to take a peek under the hood.
1. Have your key relationships changed? One of the most important criteria is whether the folks you have trusted with important responsibilities are still the right folks for the various jobs. Are the people you have selected as Personal Representative, Trustee(s), health care proxies, power of attorneys still the right folks for those roles? People age, move, pass on and become distant. You need to consider whether the folks you entrusted with these important responsibilities are still the right choices.
2. Have your beneficiaries passed or become distant and or estranged? Things change, even close loving relationships. If this has happened, or if one or more of your beneficiaries has passed or become aged you would be well advised to reconsider your gifting.
3. Have your assets changed significantly? If they have increased, there may be tax implications to consider. If they have decreased, your long-term financial plan may require an adjustment. If your health has devolved or that of your spouse or significant other, it might be the right time to consider the financial impacts of long-term care costs and the best way to adjust to that reality. There are things that can be done to help your heirs and spouse. This is especially true since real estate assets have increased in value quite considerably since 2009. The equity in your home could require a recalibration of your estate plan.
4. Investment accounts, IRA’s. You need to make sure that you have named contingent beneficiaries so that your funds don’t become part of your estate if your spouse predeceases you. Those gifts need to reconsidered to make sure that they are consistent with your present relationships.
5. The timing of your bequest provisions need to be reviewed. Your children may have matured to the point that they can receive all or most of their bequest at one time. Most often, estate plans give children their funds in increments as they mature. But kids have a way of getting older (as opposed to their parents). Have they matured enough so that their funds do not need to go into trust?
6. Similarly, you might want to create trusts if your child or children are in relationships that are challenged.
7. If you have moved or spend close to or more than six months a year in another state, you might want to inquire about changing your legal residence to take advantage of tax laws in that state.
8. If you have not put all your assets in your trust, or don’t have a trust, this is the time to do so. Otherwise, your estate will have to be probated which involves unnecessary expense and delays the time your personal representative will have access to your funds to pay bills and distribute assets to your heirs.
These are the main reasons to do an estate plan checkup. If our law firm prepared your estate plan, your review is relatively simple. We have prepared and sent you, in all likelihood, a summary of the main provisions of your estate plan. Dust off the summary and see if there are things that need to be changed. If you can’t find it, call us and we will email it to you for your review.
If your review reveals things that need to be changed or discussed, please call to discuss, or call to schedule an appointment. We will be glad to assist It can usually be done time and cost effectively.
We wish you a New Year of good health, prosperity, and personal satisfaction.