All too often, clients establish estate plans and forget about them. But an estate plan is useless if it is not kept up to date with the changes in your life, trust laws, and taxation regulations.
It is important that you periodically revisit your estate plan to reflect the changes in addresses, assets, and family dynamics. The best way to securely plan your future is to have an up-to-date estate plan.
Here are the top 5 reasons why you should review your estate plan with your attorney as soon as possible.
1. Evolving Family Dynamics
A change in your family dynamics is one of the biggest reasons to review your estate plan. There is no doubt that you want to make sure your family and loved ones are correctly cared for in the future. If you have married since establishing your estate plan, you will need to review your estate to ensure your spouse will share in your estate. And if you are now divorced, then it’s safe to assume you wouldn’t want your ex-spouse to receive a portion of your estate.
The addition of a child to the family is another big reason to review your estate plans, and would necessitate a change in your distribution scheme to your loved ones in the event of your passing.
And lastly, in addition to changes to your immediate family, you should review your estate planning documents for changes in designated trustees, executors, healthcare agents, and financial agents.
2. Changes in Your Finances
A change in your finances may usually correlate with a change in your assets, and this may require you to ensure that your distribution schemes are in line with your finances. For example, if you have acquired new assets since establishing your will or trust (including real estate or interest in a business), then it is essential to contact your estate planning attorney to be sure that your new assets are covered and/or properly distributed in your will or trust. And if your assets have grown significantly, it is a good idea to explore tax planning with your attorney as well to avoid high estate taxes in the event of your passing.
Occasionally, clients may forget to keep their trusts properly funded. This happens when they acquire new property and assets but forget to title them to your trust. Or they take real estate and assets out while in the process of refinancing their trust and forget to put the assets back in. The worst case scenario with an improperly funded trust is that in the event of your passing, it would take your family large amounts of time and money to petition the court to transfer your property back into your trust.
3. Your Career Path
Just as your finances and assets may grow or change, so may your career. Since the establishment of your estate plan, if you have changed career paths, started a business, or have gotten that big promotion, your financial goals and motivations may have changed as well. It is important to speak with your attorney about a simple review of your wishes and distribution schemes in your estate plans, and any changes brought on by a change in income or assets should be carefully addressed.
4. Your Health
Life is unpredictable. People age, accidents happen. And your health can be affected in many ways because of these factors. Experiencing a change in health or having an unexpected medical condition may cause you to reassess your wishes in your will or trust. It may be time to consider amending your healthcare agent so that someone you trust can make medical decisions for you should you lose decision-making capacity.
5. Insurance Policy Changes
Over time, you may find that you want to change the terms, coverage options, or beneficiaries on your insurance policy. When this happens, it is recommended to have your estate planning attorney review and draft the proper documents to ensure everything is coordinated and correct in your estate planning documents. It is important to note that your insurance policy’s beneficiary designation will trump what your will or trust designates.
CALL US FOR A FREE CONSULTATION
If you or a loved one needs help setting up or reviewing a living trust, call Amity Law Group today at (626) 307-2800 for a free consultation with our Los Angeles estate planning lawyers. We serve clients throughout Southern California, including Los Angeles, Pasadena, Arcadia, San Gabriel, and Rosemead