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Should You Change Your Estate Plan as Often as You Change Your Phone?

08/25/2016

finished your estate plan

So you finally finished your estate plan and are enjoying the peace of mind knowing that your affairs will be handled the way you want. But are you really ever done? Only if your estate plan was completed very recently.

There’s one very important step that remains: a periodic review and update of your estate plan in its entirety.

What?

Yes, that’s right. If your plan was done five years ago or longer, there might be a few changes in your life besides new drapes and a flat screen TV.

Real life changes can happen—like getting married, getting divorced or maybe having a child … or two … or three. It could be that you’ve reconnected with a daughter or son who was once estranged.

These changes can be outside your control—like income tax and estate laws that are amended, repealed or are newly effective. That once perfect estate plan may not be a “10” any more. It has lost some points because it’s out-of-date and—in its current state—has the potential to be inaccurate and cause much grief for your heirs.

Change is constant, and WMUR’s article, “Money Matters: The 'final' estate-planning step,” says that there are some key indicators that show when a review is in order.

It could be a change in:

  • Estate valuation: The value of your estate may have changed significantly, like through receiving a sizable inheritance or winning the lottery.
  • Economic situation: Your income level has been modified or you’re retiring.
  • Employment: If you or your spouse has a job change, it may call for an estate plan modification.
  • Family situations: The marital status has changed for your child, grandchild or you. There’s a new baby in the family. Your spouse, child or grandchild has died. You or a family member are now ill or incapacitated. Other individuals like your parents are now dependent on you.
  • Businesses: Your closely held business interest may have changed. Maybe you formed, purchased or sold a closely held business, which could mean liquidation or reorganization. Did you execute a buy-sell agreement with your partner, or are there differences in employee benefits, pension plans or deferred compensation plans?
  • Major transactions: This includes making substantial gifts and borrowing or lending money—even purchasing, leasing or selling assets or investments.
  • You moved: If you moved to another state, it may impact your planning.
  • A new vacation home in another state: This could have ramifications.
  • Any litigation: Lawsuits can affect your finances.
  • Insurance coverage: Changes in your insurance coverage may impact your estate planning needs or may make updates necessary.
  • Death of a trustee, executor or a guardian: If one of the individuals you designated dies or changes his or her mind about serving, you must revise your estate plan and replace that person.

Short of developing psychic powers, there is no way for you to know what the future will hold, especially changes in estate law. However, give some honest thought to your life, including your family and the ones you love. Have you or they undergone significant changes? Is it likely that something you put in a will four years ago doesn’t really suit your needs now? If it’s been four years or more since you last reviewed your estate plan, make an appointment with your estate planning attorney. You may find you need a simple refresh, or there may be opportunities that you are missing. You’ll regain that peace-of-mind feeling!

Reference: WMUR (August 11, 2016) “Money Matters: The 'final' estate-planning step”

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