Many people believe that once they have executed their estate planning documents, those documents can remain in the safe deposit box until the day when they may be needed. However, your estate planning documents should be reviewed and revised over time to be sure they reflect your family’s current needs. You should generally review your estate plan for necessary updates every three to five years; however, with the current “stay at home” orders in place, you may have an unusual opportunity to spend time reviewing existing plans with those close to you, and determine necessary changes or items to be addressed. Everyone should have a will, financial power of attorney and healthcare power of attorney. If you have those three important documents, we want to be sure they are up-to-date.
There are, of course, certain life events that may require an immediate review of your estate plan.
- Changes in Beneficiaries – Additions to your family such as the birth or adoption of a child, or marriage (or divorce) of yourself or one of your children, or the simple passage of time.
- Substantial change in assets – A significant increase or decrease in the value of your assets is another reason to update your estate plan. Your estate plan may no longer need to be as complex as it once, or you may want to incorporate trusts or professional fiduciaries if the value of your assets has increased, or if you need special management of assets for certain beneficiaries (minors or beneficiaries with special needs).
- Changes in the nature of your assets – Have you purchased a vacation home in another state and plan to maintain homes in more than one state indefinitely? Have you invested in or started your own business? Does your current plan address these assets?
- Your state of domicile – do you have real property in more than one state? Where to you plan to reside? Answers to these questions will dictate the state laws that will govern the management of your funds upon death or disability, and state laws can vary widely.
- Tax law changes – Both Federal and state laws change over time with respect to inherited property. Earlier this year Congress made significant changes to the laws regarding distributions from inherited retirement accounts for decedents dying after January 1, 2020. Additionally there is a growing possibility that federal estate and gift tax laws may be changed quickly and dramatically if Congress makes changes next year, even before the tax laws revert to the more onerous versions as currently scheduled for 2026.
- Executors, Trustees and Guardians – Are the provisions in your documents current? These are important people who will make significant financial and personal choices for your family’s future – make sure you have named the right people.
