We sometimes view estate planning as a one and done proposition. Keep in mind, our lives change and so must our plans. If it has been several years or more since you have signed your estate planning documents, then it is possible that the plan won’t achieve your goals. Periodically reviewing your plan with an estate planning attorney will help ensure alignment with current laws and what’s important to you. Here are some red flags that may indicate that it’s time to review your plan.
1. Fiduciary failures
Outdated estate plans often name a personal representative or fiduciaries who may no longer be right for that position due to age, certain medical conditions, or even death. Maybe one of your children, having reached sufficient age and maturity, would be a better choice now. If you name a professional such as an attorney or CPA for one of these important roles, that person may have retired or stopped practicing. Reviewing your fiduciaries is step number one to ensure a successful plan.
2. Beneficiaries not updated
Since you last created your estate plan, you may have new family members, such as a new child or grandchildren, that you’d like to add as a beneficiary. Perhaps your relationship with a beneficiary has changed because of, for example, a divorce, and you no longer wish to include them as a beneficiary. Any changes in family situations should be reviewed with an estate plan attorney.
3. Technology Changes
When you first drafted your estate plan, incorporating digital assets into your plan may not have been a consideration. Today, many of us store photos in the cloud, own an online business or web domains, cryptocurrencies, credit card reward points, and important logins to social media platforms to name a few. You need to consider how ownership for these digital assets will transfer if something should happen to you.
4. Critical plan components missing
When you first created your estate plan, was your Last Will and Testament the only document you created? This document is only useful when you pass away. In addition to the Will, we recommend our clients have a Health Care Proxy, Durable Power of Attorney, HIPPA and Living Will documents. These documents are needed by your loved ones should you become unable to make medical or financial decisions for yourself. Additionally, some documents need periodic updating. For example, some banks will not accept a Durable Power of Attorney if it’s older than five years.
5. Your child may not get their inheritance
An inheritance from a parent could be subject to division with your ex-son or daughter-in-law. This may not be an outcome you want for your estate plan. This is also true if your child has credit problems. Many inheritances have been claimed in the probate court by unpaid creditors. If these issues are of concern to you, discuss them with your attorney.
6. The tax man cometh
When your plan was created years ago, you may not have given much thought to the estate tax liability. Massachusetts has an estate tax threshold of $1 million. This means if the value of your estate is one dollar over that amount, the whole $1 million is taxed. With home prices soaring, life insurance death benefits payouts, the accumulation of other assets over a lifetime, etc., reaching this level is not as difficult as it has been in the past. With the ever-changing estate tax landscape, reviewing your estate plan can save your estate thousands of dollars in estate taxes.
7. You moved or own property out of state
Each state has different laws governing probate and estate planning, so making sure your estate plan conforms to the laws in the state you reside is critical. Consult with an estate planning attorney if you move to another state. If you own property in a state other than where you reside, your personal representative will need to probate in that state. Placing your property in a revocable trust can avoid this headache down the road.
As we evolve with life’s changes, so too must our estate plan. Changes in the law, your family assets, and what’s important to you will also have a bearing on your plan’s effectiveness. Regular estate plan review meetings with your attorney will help ensure your plan continues to meet your intended goals. Generations Law Group has implemented our Client Care Program to make these meetings easy and cost effective.
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