You Thought You Were Done? Maintaining Your Estate Plan

How often do you think about your estate plan? The answer is probably not very often. Most people think that once the process of creating an estate plan is done, the plan can simply sit; they thought it through at the time and put it in a safety deposit box, never to be looked at again. Guardians are assigned, beneficiaries designated, power of attorney is in place, and health directives are made. But what happens when the plan cannot or should not be executed exactly as you originally intended?

Your estate planning documents are the principle basis for the smooth, efficient management of your estate and for the fulfillment of your wishes. They address your wishes from the time of incapacity until after your death. Too many times, an estate plan never revisited leaves assets to those that weren’t intended. Or worse yet, those given power of attorney to help you in times of incapacity are no longer in your life or not here at all. It is imperative to relook at your estate documents regularly, especially when life changing events occur, to ensure your future wishes are met and your loved ones do not experience undue stress.

We offer the following list of situations and other considerations that may compel you to make changes to your plan.

• The below list of major life events can affect your estate plan. With any of these events, your life and family situation can change very quickly. If there was a divorce, your ex-spouse may still be a beneficiary. You may want to care for a new significant other, spouse, or new generations. Guardianship of children and successor plans may have changed. You may want to consider step-children in your plans, as they would not inherit anything unless named, as they are not your children regarding inheritance laws.
  • Marriage, divorce, separation, remarriage, domestic partnerships, significant others
  • Birth or death of a spouse, children, or grandchildren
  • Blending families, gaining step-children, or adoption.
• Beneficiaries may change and should be reviewed. You may want to add or remove some beneficiaries as life changes. If this happens, be sure to review that the beneficiary designations on your retirement assets, such as 401(k)s, IRAs, pensions and annuities. Additionally, be mindful of instances where your beneficiaries have special needs or serious health issues, which may necessitate the formation of a special needs trust. To ensure your desires are met, you might need the legal language to do so in your documents.
• Moving to a different state will necessitate updating your plans, as state laws differ when it comes to estate planning. The flow of decision making, property rights of spouses, the rights of children to inherit, and estate and inheritance taxes can vary significantly. Seek a professional familiar with the particular state estate planning laws for helpful or necessary updates.
• Significant change in your assets or liabilities, namely your financial position, can affect your estate plan. Have you acquired assets, such as a home, business or inheritance? Or taken on more debt? Review how your assets are owned and determine if they should be retitled to ease transfer at your death. Also, review your plan for the distribution of assets to determine if anything should change or have tax implications.
• Decision making desires for financial purposes or health and incapacity planning may have changed. Consideration may have changed as to who you can rely on as you age.
• New legislation affecting estate taxation and planning are always changing. Review with a professional the language and impact on your estate that a change in laws can have.
• Charitable inclinations can change. Are you more or less charitably inclined? Are you passionate about a new charity? Assure that your intentions are conveyed in your estate plan.
• Consider your trustee carefully and inform any people that are named in your estate planning execution process of their potential roles, so that they are aware of your intentions.

Updating and maintaining your estate plan is about control; your control during your lifetime and after you are gone. It takes care of those you care about financially and ensures that those you care about know your last wishes. If your estate plan is a few years old, you should review it with your trusted advisors, as having your affairs in order as you desire can bring you great peace of mind. Please do not hesitate to connect with us if you have any questions about your estate plan, and learn more some of our estate planning practices here.