Is your estate plan current? Your financial needs and personal situation will change over time. A regular checkup of your estate plan can remind you to take care of certain important details, such as revising your will or changing beneficiary designations, and will help prevent unintended consequences.
Here are some common situations or events that should prompt you to review your estate plan.
Change in Asset Values
Your estate may include assets that have grown in value since you established your estate plan. Perhaps you have acquired more property or sold your business. Your present plan may no longer accomplish the objectives you originally intended, such as protecting particular assets and minimizing taxes. If that is the case, you may want to give more to charity and/or increase the amount you plan to leave to loved ones. An estate plan review can help put your plan back on target.
You should also review your estate plan if the value of your estate has decreased or if you’ve made specific gifts in your will of assets that you no longer own. After all, you don’t want to leave any of your intended beneficiaries empty-handed.
Change in Family Size
Births, deaths, marriages, divorces—any of these events could change how you want your assets distributed. While a birth or marriage may add a potential beneficiary to your estate, a death or divorce is likely to have the opposite effect.
Making the transition to retirement provides an ideal opportunity to review your estate plan. Although your retirement may not have an immediate impact on your estate plan, it will have an eventual effect. Instead of adding to your retirement savings, you may begin withdrawing assets for retirement income. Knowing your retirement income resources can help you decide when, and if, it is possible to transfer property to your family and other beneficiaries.
Relocation to a Different State
State and death tax laws differ from state to state. If you move to another state, you should find out the rules of your new state and have your plan revised accordingly.
Tax Law Changes
Changes in the tax laws can render your estate plan outdated. Make sure your estate plan is compatible with current law and that it adequately reflects your wishes.
Major life events and changing tax laws make it a priority to have your estate plan reviewed by a professional on a regular basis.