Revising Your Estate Plan
Many times when people create an estate plan, it is one thing on the proverbial “to do” list that might get put off longer than we want. But it feels great when we finally get it checked off as DONE! And while that should definitely be the case, you should also review -- and revise -- your estate plan periodically.
We’re in an extraordinary time with COVID19 dictating how we are living our lives in a way that we did not expect. In a world not too long ago, we imagined relying on people making financial or medical decisions for us who did not live near us. We have adequate virtual and digital resources to do things online; and if not, travel was available and relatively easy. This is a different world.
There are several circumstances that arise that may require revision of your plan:
The People
Are the people who you designated to manage your money still the right fit for you? Are they healthy enough to take on that burden? (Remember: financial management comes up during incapacitation as well as at the time of death.)
Are you still happy with the list of people who you selected to make healthcare decisions on your behalf? Are they nearby enough to talk to your doctor on short notice?
If you have children, are the guardians that you nominated still appropriate?
Are the beneficiaries “right”? If you didn’t create an estate plan or a trust with us, does your plan account for your children who have been born/adopted since the plan was created? Or, perhaps your children are married with their own children now. Do you have any issues with the partner that your child chose for them self? Do you want to provide for your grandchildren directly?
The Structure
There are several ways to design an estate plan and big decisions that are made as part of the planning process.
Did you select a survivor’s trust, but now believe an AB trust might be more appropriate?
Did you want everything to go to your children outright but now want it to stay in trust for them?
Did you decide that your children are (more or less) responsible and should be able to receive any potential inheritance sooner or later?
Your Assets
Right now, the estate tax exemption amount is $11.58 million per person, or $23.16 million per married couple. In 2026, that law is set to sunset if Congress doesn’t act, and the exemption amount will drop to somewhere between $10-12 million. If your assets are starting to approach those exemption amounts, you may want to consider different estate planning tactics.
Changes in the Law
The laws change and how it can impact your estate plan can change too. For example, have you heard of the Secure Act? It went into effect on January 1, 2020. You can read more about it here.
Take Action
Just as critical, perhaps you are the potential beneficiary in this scenario. Did your parents create an estate plan a long time ago when you were a child, but it can now be revised to reflect better your current living situation? There is no better time than now to have this conversation with your parents.
If you already have an estate plan, we recommend that you review it every 2-3 years to make sure that it’s still what you want—and to account for any of the above changes. If you’d like us to conduct a review of your estate plan, whether you created it with us or with someone else, please contact us for a complimentary review.