A well crafted estate plan is designed to stand up against foreseeable eventualities, but ordinary life changes in family relationships, revisions in personal goals, financial changes and new legislation can make provisions in a well designed plan inoperable, unnecessary or obsolete. Keeping your estate plan current is vital to achieving the goals you set out to accomplish. Consequently, consider the following events which may signal a need for review and potential revision of your estate plan:
Death: The death of a beneficiary or agent may indicate a change in your plan. If you've named someone as your personal representative, successor trustee, power of attorney or the guardian of your child, certainly revisions will be required if the person dies before you. The death of your spouse, child or other beneficiary likewise may mean that your plan should be adjusted.
Birth: Parents and grandparents will want to make revisions in the plan to include a new child or grandchild.
Marriage: If you get married you should definitely review your estate plan. Second and subsequent marriages present unique planning issues, particularly if both spouses have children from a prior marriage. You may also need to review you plan when your children marry.
Divorce: You should review your estate plan not only if you divorce but also if your children divorce, especially if the divorcing child is named as a beneficiary. A divorcing spouse may become a creditor so you may need to review your plan to determine if you have included adequate asset protection.
Changes in your estate: A substantial increase or decrease in the value of your estate may make revisions necessary.
Business Changes: Starting, buying or selling a business are all events that may signal time for a revision in your estate plan. Any revision in your business form, entering into a buy-sell agreement or the death of business partner are also events that may impact your estate plan.
Changes in the laws: Tax laws change on average every two years and usually with each administration. Any changes in the law may make your estate plan outdated. For example, the federal estate tax exclusion amount was increased to 11.7 million dollars for 2021, but is scheduled to sunset in 2026. The new administration may reduce the exclusion amount before the scheduled sun set to recover the costs of COVID relief spending. Estate taxes may become a factor in your planning if you are not now impacted.
The best way to keep your estate plan up-to-date is to review it on a regular basis.
