Estate planning is often a confusing and complicated process. After all the paperwork has been signed, with all of your assets and heirs accounted for, you may not think about your Will again.
Forgetting to update the Will on certain occasions, however, can leave many changes in your life unaccounted for.
Your Will and living trust, along with the entirety of your estate plan, should be reviewed at least once every five years, and even more if there is a change in the law, your personal circumstances, or your financial standing.
A recent Forbes article highlights some changes in your life that may be cause for an estate plan update:
Law changes
Currently, each person can transfer up to $5.12 million tax-free, alive or dead. If you haven’t updated your will in the past five to 10 years, they may no longer express your intent about how much money is destined for trusts for children and/or grandchildren, rather than a husband or wife.
Probable income rise
If you’ve made a promising investment or are expecting a huge business success, you may want to consider shifting some of that fortune potential to your heirs. Once the appreciation occurs, making transfers will add up, using up more of your $5.12 million lifetime gift tax exemption, possibly requiring you to pay gift tax on a larger amount. If you can transfer some holdings before they increase in value, they will be sheltered from gift and estate taxes when they appreciate.
Financial setback
If you’re experiencing some financial woes, now may be the time to update your estate plan. A combination of low asset values and decline in interest rates used in structuring various wealth-transfer tools drastically dropped the tax cost of making lifetime transfers.
Change in committed relationships
If you get married, divorced, or separated, you shouldn’t wait to change your estate plan to include (or exclude) your spouse’s role in your Will and living trust.
Becoming a parent or grandparent
For many people, this is the first time even considering an estate plan. Naming a guardian for your child and providing for them financially if something happens to you are some of the most important things to update.
Losing a spouse
You may be able to add any unused exemptions of your most recently deceased spouse within nine months of becoming a widow. Also be sure to revise your will and living trust and name beneficiaries for anything you inherited from your spouse.
Bad health
If you are unfortunately diagnosed with a terminal illness or degenerative disease, you may take comfort in getting your estate plans in order. This is the time to have your attorney review your documents and update them.
Having your estate plan up to date, with all life changes accounted for, may make disputes—such as will and trust disputes—less likely after your passing. Our firm does not handle estate or trust planning or drafting. But, if you have a probate, trust or estate dispute or lawsuit, we do handle those matters. Please contact us if you have any questions.
