By: Barry E. Haimo, Esq.
July 5, 2018
8 Signs Your Estate Plan May Now Be Outdated
You did it. After years of pushing it, you finally sat down and put together a strong estate plan. You and your attorney were thoughtful, thorough, and careful. Together, you meticulously crafted it to reflect your life and your estate exactly as they were at the time.
Those last few words are really important: “as they were at the time.” Because life doesn’t stand still. As long as you’re alive, things will keep changing and evolving.
This is a good thing, but it also means that your perfectly crafted estate plan from 5 to 10 years ago may not be quite so perfect anymore. In fact, it’s recommended that you revisit your estate plan once every three years and look at advanced care directives (Power of Attorney, Health Care Surrogate and Living Will) documents specifically every five years.
Beyond these time frames, though, how do you know if it’s time to take another look at your estate plan? There are a number of signs. Ask yourself the following questions.
Have You Had New Additions to Your Family?
Kids? Grandkids? Even great grandkids? If they arrived after you finished your estate plan, they’re probably not in it, except (possibly) in the most general and generic way.
For example, you might had added language saying that any grandchildren get such-and-such. That was fine when grandchildren were just theoretical, but now that little Lacy and Benjamin exist, you may not feel the same about what you want to leave them.
Have There Been Marriages, Divorces, or Deaths?
Perhaps your spouse passed away after you completed your initial estate plan and you had arranged it so that they would be your major beneficiary. That’s something you should change.
Or maybe your children were all single before. But now two of them have married, and you want to make sure their spouses are covered as well as them.
Alternatively, there may have been divorces or other types of falling out that have caused you to rethink who you want to leave your assets to.
Have the Medical Conditions of Specific Individuals Changed?
Since you created your estate plan, one of your beneficiaries was diagnosed with Alzheimer’s and now requires full-time, long-term care. To make sure they receive it, you will need to revisit your plan and adjust it.
That’s just one example. The issue that necessitates the change could be related to accident or illness, and it might relate to anyone.
Have Your Kids Grown Up?
What you want to leave your kids at 5 – or even 15 – is often different than what you might leave them at 25. If your children are no longer minors, there are several changes you will likely want to make to your plan to make sure it reflects your current wishes and who they are today. Importantly, if your kids are young adults, they now need their own documents, as you have no legal authority or access to their information.
Have the Laws Changed (for Better or Worse)?
The estate plan tax exemption today is five times what it was back in 2008. If you planned your estate based on the current numbers of the day, your beneficiaries could be losing out on a huge chunk of your assets.
And this is just one example. Make sure your plan reflects the most up-to-date laws and rules.
Have You Opened New Retirement Accounts?
While 401ks, annuities, and IRAs will automatically be left to your estate and distributed based on intestate law or as designated in your will, there is a far better way to handle them: beneficiary designation.
Just one benefit of this is that it allows your named beneficiaries to gain access to these assets without having to go through probate. This will save them time and frustration at a time when they’d rather be grieving.
Have You Moved to a New State?
The U.S. is a patchwork quilt of different rules and laws, with each state adding their unique spin on things. This is especially true when it comes to estate planning.
If you originally drafted your plan in one state and then moved to another, you absolutely need to have an attorney in your new state make sure it conforms with the laws of your new home.
Have Your Assets (or the Value of Them) Changed?
Maybe you shelled out for a shiny new Tesla since you drafted your estate plan. Or sold real estate. Or added a bunch of stamps to your collection.
Or perhaps that collection has doubled in value over the ensuing years and now granddaughter Lacy is getting a much more valuable asset than grandson Benjamin. To account for these types of issues, you need to reexamine your plan and make any desired changes.
These issues are just the tip of the iceberg. There are countless reasons you to take another look at your plan after several years pass. Let us help you make sure it reflects your current wishes (and current laws) by setting up a time to look at your current financial situation together.
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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