For starters, if you have an estate plan in the first place, then congratulations!
Unfortunately, you are in the minority.
Just over half of all Americans ages 55 to 64 are without even a simple Last Will and Testament.
Such was the finding in a recent survey by Forbes, as reported in its article titled "8 Reasons to Revise Your Estate Plan Today."
Nevertheless, even if you have an estate plan, odds are good that your personal and financial situation will change at some point.
It has been said that the only constant is change.
Even if your estate plan was crafted by a skilled and experienced estate planning attorney, you will want to contact him or her if any of these things occur:
Marriage or Re-marriage.
Saying "I do" does not automatically change the provisions of your will or trust to reflect your new marital relationship.
Not only should you update your legal documents, but remember to review and update the beneficiary designations on retirement funds and life insurance, too.
After a divorce your goals will probably change and so should your estate plan. When your divorce is finalized, revise your plan as quickly as possible to reflect your new goals and intentions.
When you have a child or adopt, you will want to include your son or daughter as a beneficiary of your estate. In addition, you need to appoint a legal guardian for any minor children in the event you and your spouse die or are incapacitated.
Injury or Illness.
If you (or one of the members of your family) become seriously ill, you may want to consider changing your estate plan accordingly to reflect their unique needs.
For example, a supplemental needs trust provides (and protects) an inheritance for your loved one with special needs (and, ultimately, for your other loved ones) in manner that will not negatively impact his or her access to government benefits.
Change of Plans.
With time your goals and intentions naturally change and your estate plan should reflect your current intentions. Not the goals you had five years ago.
If you or your spouse expect to get a sizeable inheritance, there may be new opportunities to reduce taxes or provide creditor protection. The increased value of your estate may also change your thinking when it comes to how those inherited assets will be distributed when you die.
Buy or sell a business.
If you purchase a business, then you need to create a succession plan. If you sell your business, then the proceeds may require a different plan for asset distribution and careful planning to reduce the tax burden for your heirs.
Moving to another state.
Estate planning documents are generally legal from one jurisdiction to another, but each state has its own laws. If you move from a separate property state (like Kansas or Missouri) to a community property state (like California), then it may be prudent to convert your separate property to community property to take advantage of favorable income tax treatment.
As you can see, should you experience any major personal or financial event like those noted above, then be sure to review your plan with an experienced estate planning attorney and make certain all of the changes are incorporated.
Even if your personal situation has not changed, a periodic review of relevant state and federal tax laws is always prudent.
Life is not a one-time event and neither is estate planning. Your plan needs to change as your life changes.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.
Reference: Forbes (January 28, 2016) "8 Reasons to Revise Your Estate Plan Today"