skip to Main Content
When should you update your estate plan?

When Should You Update Your Estate Plan?

There’s no question about it, establishing or updating your estate plan is one of those things that people typically put off for one reason or another. It is generally viewed as task that you’ll eventually get around to dealing with. Oftentimes, clients will not consider planning for their own incapacity or death until tragedy strikes them or another loved one.

But putting off establishing or updating your estate plan is a mistake that can ultimately cause an unnecessary expense and emotional toll on your family in the event you pass away or become incapacitated unexpectedly. If you have not established your estate plan, you should contact a qualified estate planning attorney who can review your circumstances (family, finances, and goals), and provide you with a number of options to meet your objections and best protect your family in the event you pass away or become incapacitated.

If you have already established your estate plan years ago, you should consider reviewing your estate plan with a qualified estate planning attorney and possibly updating your estate planning documents to meet your current needs.

As a general rule, you should update your estate plan at least every five years and after any major life event. Here are some major life events that should cause you to review/update your estate plan:

Marriage

You may want to name your spouse as beneficiary of your estate, and appoint him/her to roles of Executor, Trustee, Agent under Durable Power of Attorney, Agent under Health Care Proxy, and Authorized HIPAA Representative. This will help avoid any unwanted confusion or litigation about who should serve in those roles if you die or become incapacitated.

New Child

The birth or adoption of a child is a huge life event that will not only leave you overjoyed (and exhausted), but will raise questions about what happens to your child if you die or become incapacitated. Establishing a Last Will and Testament that nominates a guardian(s) and executing a Standby Guardianship Designation will help ensure that someone you know and trust will make important decisions for your child.

If you have the joy of becoming a new grandparent, you may want to update establish trusts for the benefit of your grandchildren or updating your estate plan to include them.

Divorce

If you are divorced or are in the process of getting a divorce then you may want to update your estate plan to remove your spouse as beneficiary of your estate and remove him/her from any positions of authority (executor, trustee, agents, HIPAA representative, etc.).

A Major Change In Financial Status

If you have experienced a significant increase or decrease in the value of your assets (business interests, real estate, brokerage assets, etc.), it is a good idea to reassess your financial situation and update your estate plan accordingly. This may mean that you now must consider estate tax planning, or reallocating distributions to different beneficiaries. Oftentimes this occurs when you have inherited property from a loved one or are faced with an unfortunate economic downturn. An estate planning review and update may also be wise if you have purchased or sold a major asset (finally cashed in on your business, or purchased a new one, etc.).

Retirement

Most people put forth a lot of effort to financially plan for retirement. Although this is advisable, it is also advisable to make sure that your estate plan reflects changes in your income and family circumstances.

Health Diagnosis

Unfortunately, a poor health diagnosis usually means that it is time to get your affairs in order and that includes reviewing and updating your estate plan. An experienced estate planning attorney can review your entire estate plan and provide you with guidance on how to quickly and efficiently ensure that your wishes will be honored.

Death

It is generally a good idea to revisit your estate plan after the death of a beneficiary, nominated executor, trustee, or any one with an important role in your estate planning documents. This can help avoid a potential vacancy in fiduciary status, mitigate tax liability, or prevent your assets from being inadvertently distributed in a manner you may not want.

If none of these major life events have occurred, it is still wise to sit down with a qualified estate planning attorney to review your estate plan since there has been significant changes in federal and New York State laws in the past five years, namely the Tax Cuts and Jobs Act, which has significantly changed the Estate and Gift Tax rules, and the SECURE Act that has drastically changed the rules related to inherited retirement accounts (IRAs, 401(k)s, 403(b)s, etc.).

Life and the law change constantly. It can be overwhelming, but our law firm is here to help review and update your estate plan no matter what the reason.

Eric Einhart

Russo Law Group, P.C.
100 Quentin Roosevelt Blvd., Suite 102
Garden City, NY 11530
800-680-1717

This Post Has 0 Comments

Leave a Reply

Your email address will not be published.

Back To Top
Search