Whether you have a Will or a Living Trust, it is important to review your estate plan periodically. Because family circumstances, assets and laws change over time, your estate plan may be significantly affected. A review also reacquaints you with the purpose of the documents and the choices you have in place. Other reasons for possible changes to your estate plan are:
1) Marriage. Marriage can automatically give each spouse some rights in each other’s property. However, marriage does not automatically change your will or trust to provide for the new spouse. It is important to examine your estate plan in light of the new situation and your mutual and separate goals.
2) Divorce. Divorce is particularly disruptive to an estate plan. Goals which you had before, such as providing for the now ex-spouse, probably have to be changed. It is also important to check the beneficiary designations of your retirement plans and life insurance.
3) Birth or Adoption of a Child. The addition of a new family member can radically alter your estate plan.
4) Illness. If you or one of your family members becomes seriously ill, you may want to consider changing your estate plan to reflect their increased needs. If or when there comes a time that you cannot act for yourself, you will want to make sure your estate plan clearly outlines who will make decisions on your behalf. Also, if a loved one now has special needs, you will want to make arrangements to leave assets in a trust that will not disqualify him or her from receiving government benefits.
5) Change in Feelings about Family and Friends. With the passage of time, you learn more about yourself and others. For example, you may decide your brother John, who lost everything in Enron and WorldCom, may not be the best selection to manage your assets.
6) Change in Tax Laws. As we all know, there have been recent changes with regard to estate tax. Congress rarely leaves tax law alone for long. Changes in tax law can mean your estate plan no longer accomplishes its goals.
7) Change in Non-Tax Laws. Periodically, state legislatures change substantive non-tax laws. These laws may affect who gets your property or how your trust may be managed. Recently, in Maryland, laws have changed regarding powers of attorney, holding property as tenants by the entirety and the rights of same sex couples to marry. You will want to understand how these changes may affect your estate plan.
8) Inheritance. If you or your spouse have received or expect to receive a significant inheritance, there may be new opportunities to reduce taxes or provide creditor protection.
9) Change in Assets. A significant change in the nature or extent of your assets may give rise to different estate planning options. For example, the acquisition of a farm or business may raise issues of succession planning and discounted gifting.
10) Change in Residence. While estate planning documents typically are valid from one jurisdiction to another, each state has its own peculiarities. In moving to a new state, it is important to seek a qualified estate planning attorney to review your documents to determine if changes need to be made.
Take the time to determine if an estate plan review with your attorney would be beneficial. Make sure you know where your original documents are located, as you will need to bring them to your estate plan review with your attorney. Remember, without your original documents you have no enforceable estate plan.
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