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- Change in Family Circumstances. There can be a variety of changes in family circumstances that warrant revisiting your estate plan, such as births, deaths, marriage and divorce. Even if there is not a dramatic change in family circumstances, you may have named certain individuals as your fiduciaries (such as agent under your power of attorney or personal representative under your will), and as time passes these individuals get older, possibly move away, or may no longer be the best choice to serve in these roles.
- Children Reaching Adulthood. If you sign a will while your children are young, it’s important to revisit your planning when your children reach adulthood. For example, if your plan calls for assets to be held in trust, it may now be appropriate to consider leaving the assets outright to your children. Conversely, if your assets will pass outright to your children under your current plan, you may determine that the assets should instead be held in trust. You may want to leave assets in trust due to concerns that your children will not prudently manage their inheritance, or you may just want to take advantage of the protections offered by trusts. If properly structured, leaving assets in trust for a child can provide some protection against the child’s creditors and some protection against claims by the child’s spouse.
- Financial Changes. A well-considered estate plan will be crafted with your assets in mind. The overall value of your assets is important, as well as the types of assets that you have. As your assets change, it may be advisable to also make adjustments to your estate plan. For example, if your assets increase in value then it may be advantageous for your estate plan to include planning to reduce or eliminate estate tax at your death. On the other hand, if your assets go down in value, you may be able to simplify your estate plan. When appropriate, simplifying your estate plan can reduce costs that would be incurred later to implement a plan that no longer fits your needs.
- Updating Beneficiary Designations. It’s important to periodically check your beneficiary designations to make sure they coordinate with your estate plan. When you signed your will, you hopefully checked the beneficiary designations for your assets and made any necessary updates. As time goes by, and new assets are acquired, you may forget to name beneficiaries consistent with your estate plan.
- Law Changes. The law is constantly evolving. Over the past decade, there have been significant changes to federal estate tax law and also to state law. Your estate plan may not be the optimal plan for you in light of these changes. For example, the laws applicable to how retirement assets are distributed following death have changed significantly since 2019. Also, the estate tax laws have changed over the years. Your will may include estate tax planning as a cornerstone of the plan. Depending upon the value of your estate, it may make sense to eliminate that tax planning and thereby simplify your plan and as a result, simplify administration of your estate.
- Move to Another State. Most states recognize a will as valid if it was validly executed in another state. However, a will executed in one state may not contain a plan that is optimal in another state. Accordingly, it may be appropriate to update all or some of your estate planning documents after you make a move.
Signing a will is a good step in leaving a thoughtful estate plan for your family. To ensure that your property passes as you intend, and as smoothly as possible, you should dust off your will, and other estate planning documents, at least every 3 to 5 years, and consider whether any updates are needed. The estate planning attorneys at Lyons Gaddis can assist you in reviewing and updating your estate plan.
