Why an Estate Plan is Never a “Set-it-and Forget-it” Document

It feels great to have your estate plan completed—but that does not mean it is something you can file and forget. Life is all about changes, and your estate plan needs to keep pace.

Just one good-sized change in your life—marriage, divorce, death—and your estate plan is not just out of date, but could lead to situations that you would never have wanted. Life isn’t the only thing that changes. Tax laws change, on the state and federal levels. Treat your estate plan the same way you do your home: it needs routine maintenance.

AZ Big Media’s recent article, “Here are 8 reasons to revisit your estate plan,” provides some common reasons to make this important review:

Changes in Tax Laws. One needs only look back to 2001, when Congress passed broad tax legislation that started a dramatic shift in estate planning. Are you one of those whose estate plan was created before these changes were enacted? Without a review by a qualified estate planning attorney, you may be facing higher exemption amounts that may unintentionally impact married couples relying on traditional marital-non-marital trusts.

Changes in Marital Laws. Since 2013, federal law has recognized same-sex marriage. In 2015, the recognition of same-sex marriage became mandatory in all 50 states, which means potential new planning opportunities for these couples.

Different Family Dynamics. There are going to be marriages, divorces, new children and grandchildren, as well as family members passing away or adding responsibility for an individual with special needs. Any change in circumstances should trigger a review of your estate plan—especially when a person needs to be removed from a plan because of death or divorce.

Moving Out-of-State. Moving can affect tax rates, tax types, probate laws, and even the availability of certain types of trust. Some states are also community property states. There has also been the expansion of decanting, which is the amending of an irrevocable trust by pouring it into a new trust document, which should necessitate a review of these issues.

Beneficiary Designations Need a Review. Beneficiary designations must be reviewed periodically to ensure that they are consistent with the overall estate plan.

The Up-to-Date Financial Picture. Your investment portfolio is dynamic and changes over time. For instance, the addition of real estate or a business to a portfolio requires being sure that a trustee, durable power of attorney, or a personal representative knows and is authorized to carry out the wishes regarding succession or sale.

Changes in Views on Charitable Giving. Perhaps you want to add a charitable gift or a new cause to the plan. You should do this and make sure that all charitable beneficiaries are properly identified.

When was the last time you reviewed your estate plan? If the answer is “I don’t remember,” then chances are good you need to take a look. Have you funded accounts properly and made any necessary changes to how property is titled? Keep your estate plan updated to be sure that it reflects your life right now and what you would like to happen after you are gone.

Reference: AZ Big Media (September 1, 2017) “Here are 8 reasons to revisit your estate plan”