Of all the decisions to be made when planning your estate, there are two big mistakes to avoid — failing to plan and failing to update your plan. For those who have previously planned, the good news is that you haven’t needed your plan yet. That said, you can’t completely set it and forget it. There are certain events that should prompt a review of the decisions previously made.
- Law Changes
Whenever there is a change in the law, whether it relates to taxes, powers of attorney, or medical directives, it’s worth ensuring that the change will not affect your current situation.
- Life Circumstance Changes
As life goes on, the objects of your affection may also grow and change. Perhaps you’ve had additional children or grandchildren. Maybe you have new in-laws, or have recently experienced a divorce or the death of a loved one. It’s also possible that you’ve become more charitably inclined. Whatever the change, it’s important to make sure your choices reflect exactly who you want included, and excluded, as appropriate.
- Moving to Another State
The laws governing estates are state-specific, not federal, so it’s important to ensure that the plan you have remains valid, and has been updated if necessary.
- Asset or Liability Changes
Have you have acquired a new asset, such as a home or business, or sold something since last executing an estate plan? If so, it’s important to consider how any new holdings or liabilities may affect who you want to receive your estate and how they will receive it.
- Beneficiary Designations Become Outdated
A common misconception is that your will or living trust will direct where your entire estate goes, but such is not the case. Contractual-based assets such as retirement accounts, life insurance policies and annuities pass according to the person listed on your beneficiary designation forms. For this reason, it’s important to make sure that those designations are current. Moreover, if you’ve included any minors as primary or contingent beneficiaries, make sure your plan is set up so that they will receive their inheritance in the appropriate manner since minors cannot legally own any assets.
- Executors or Trustees Become Inappropriate
Even when you’ve previously carefully considered who will serve in these important positions, it’s time to reflect on whether those choices still make sense. Have children grown up and are now capable to serve in these more critical roles in your estate plan? Perhaps the people you chose have since aged, moved, or passed away and can no longer assume the role they once could. Determine who in your life is the best choice for these positions today.
To learn more about how estate planning may help your family, please join Solak Legal’s next FREE online event, Wine & Wills, on Wednesday, September 23rd at 4:30. A replay will be provided to all registered participants. Email Jennifer@solaklegal.com to register.
The information in this column, which was sponsored by Solak Legal as part of The Leader Expert Series, is intended to provide a general understanding of the law and not legal advice. Readers with legal questions should consult attorneys for advice on their particular circumstances. Jennifer Solak provides legal advice for families and businesses and may be contacted at email@example.com or 713-588-5744.