Is it Time to Update Your Estate Plan?

Estate Planning
Written By Sean Hanley

You should review your estate plan at least once a year and make any necessary updates to ensure that your plan mirrors your life, intent, and, especially, that it complies with current laws.

You created an estate plan. Now, what?  Can you simply put your estate planning documents in your safe and forget about them?  

Unfortunately, no.

Your estate plan requires maintenance throughout your lifetime. As your life evolves, so too should your estate plan to follow your changing intent, current laws, and strategies for tax minimization and effective and inexpensive trust administration.

When your estate plan isn’t updated during your lifetime, your wishes will not be carried out, causing your loved ones to become emotionally divided and left with the financial and stressful burden of unneeded trust administration, or worse yet, probate court involvement, during your life and on your death.

You should review your estate plan at least once a year and make any necessary updates to ensure that your plan mirrors your life, intent, and, especially, that it complies with current laws.

Some Reasons to Update Include:

New Law or Law Changes:

Laws impacting Estate Planning are in constant flux, necessitating periodic review and updates. For example(s),

  • “Proposition 19” (passed Feb 16, 2021), changed property tax laws on transfers of real property between parents and children. Does this change your planning? Now, passing property from parents to children is not as desirable from a property tax standpoint as taxes will be reassessed on transfer.

  • The federal estate tax laws are sunsetting in 2025. Is your plan outdated considering current and upcoming tax laws? New laws may impact your estate planning now and in the future. Law changes sometimes require immediate attention. 

  • Annual gift tax exclusion amounts have been on the rise. Should you start to gift as part of your planning?

Asset Changes:

  • Have you bought or sold assets since you last executed your estate plan?

  • Are all of your assets (real property, financial assets, businesses, mutual funds, stocks, brokerage accounts, investments, and any other assets) properly “funded” or “titled” into your name(s) as trustee of the Trust? 

  • Trust funding is a common problem with estate planning. Clients that fail to fund will be subject to probate. Timely updates helps to avoid the issue of properly “funding” the trust.

Change of “Fiduciary” (Successor Trustee(s)/Executor(s) & Agent(s)):  

  • Are your “fiduciaries” “willing” and “able” to act? 

    • There is no reason to name a “fiduciary” if they are “unwilling or are unable to act when the time comes (death, disability, desire, location, etc.).

  • Have your “fiduciary” preferences changed?

  • Do you have alternate “back-up” fiduciaries in the event your primary(ies) cannot act?

Keeping fiduciary preferences updated is extremely important. 

Beneficiary and Distribution Preference Changes: 

  • Have your beneficiary (who, called “beneficiary,” gets your estate) preferences changed (died, reached maturity, or other)? 

  • Have your distribution (how does your beneficary(ies) get your estate) preferences changed? (different amounts, percentages, new gift(s))?

  • Have you made arrangements for all of your property (major assets, personal property, heirlooms, pets, or other)? 

  • Do you have specific items that you want to go to specific people.

New People to Include and Prior-Named People to be Removed: 

  • Are there new people in your life (newborn children/grandchildren, or any other heirs, or individuals) that need to be included in your estate plan? 

  • Does anyone in your existing estate plan need to be removed?

New Health Concerns: 

  • Do you or your spouse, children, beneficiaries, or fiduciaries have any new health concerns that may require “special” planning?

Relationship Status Change: 

  • Did you get married or divorced?

  • Did your spouse pass?

  • Did you remarry?

  • Did you start a new committed relationship?

  • Does your plan reflect your relationship status and distribution desire?

Timely estate planning updates save you costs, ensure your wishes are carried out, and protect you and your family during your lifetime in the event of your incapacity and on your death.  

* Updating your estate planning documents requires legal assistance.  Please contact the office with any requested updates.* 

Sean Hanley