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When Do I Need to Update My Estate Plan?

By July 4, 2020 No Comments

When Do I Need to Update My Estate Plan?

With the ongoing concerns related to Coivd-19, many spouses and individuals have thought their estate planning documents.  If you have already done the work to make an estate plan, now may be a good time to revisit it to ensure that you still feel the same way about what you put into your documents several years ago.

Additionally, a complete estate plan (if you own real property) includes a living trust, transfer documents, the deed to your house, a pour over will, power of attorney and an advance health care directive. If you think that you may be missing one or more of these documents, you should seek out the assistance of an attorney.

Below are some life events/developments that should also prompt you to take another look at your estate planning documents:

A Change in the Law

Under current tax law, single individuals, who die in 2020, are not subject to the estate tax unless you own more than approximately $11.58 million. For married couples, the estate tax exemption is $23.16 million per couple. This exempt amount will continue to increase until Jan. 1, 2026, when the law automatically sunsets and the exemption returns to approximately $5 million per person.  This number has changed over the years from as little as $600,000 in 1997 to $1 million from 2002 through 2010.  If you have not updated your documents since these changes have occurred, they may no longer express your intent about how much money is destined for children and grandchildren, or your documents may be overly complicated for your current situation.

A Change in Your Relationships

If you get married, divorced, enter into a domestic partnership or end your long-term relationship, you should not wait to change your estate plan to reflect these changes. You do not want your ex-spouse to make important healthcare decisions for you if you are unable to do so.

Getting married or divorced is also a time to make changes to your life insurance, IRAs and other assets that go to designated beneficiaries.  You do not want your new spouse to end up with less than he or she would have received if you had changed the forms to make him or her a beneficiary.

Becoming a Grandparent

You may want to ensure that if something should happen to your children that your grandchildren are provided for in your documents.  Additionally, you may wish at this time to add gifts to your grandchildren in your documents.

Losing a Spouse

Soon after a spouse’s death you may want to revise your living trust and name new beneficiaries for any retirement assets you inherited from a spouse.  You also should ensure that your power of attorney and healthcare directive appoints a new family member, friend or someone you trust to take over and act if you are unable to do so as many spouses give each other these powers.

Bad Health

The diagnosis of a degenerative disease or terminal illness is a life-altering event.  Not only can it provide you comfort to know that your family is taken care of and your wishes are honored, but there may be further long-term care planning options that you wish to consider.  It is always easier to make changes to your documents while you have capacity, and you certainly should know your rights when you are facing a long-term care/nursing home situation.

Should you wish to discuss any changes or concerns you have about your current estate planning documents, do not hesitate to call the Law Offices of Lisa C. Bryant INC at (408) 286-2122 to schedule your complimentary consultation.

All materials have been prepared for general information purposes only to permit you to learn more about our firm, our services and the experience of our attorneys. The information presented is not legal advice, is not to be acted on as such, and may be subject to change without notice.

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