Think of Your Estate Plan as a Living, Breathing Instrument That Evolves as Your Life Unfolds

The legendary singer and songwriter John Lennon of The Beatles once said, “Life is what happens to you while you’re busy making other plans.” This truism applies to the plans you’ve made to provide for loved ones at death, too. As your career path changes, your wealth increases, and your family structure expands and takes shape, so may your intentions for passing inheritances. Here comes estate planning.

You’ve Done One Thing Right

Before we dive into the nuts and bolts of updating an existing estate plan, take a moment to congratulate yourself for putting together this vital instrument in the first place. Unlike most Americans, including celebrities and entrepreneurs, you have taken the crucial step of setting forth your objectives in an estate legacy plan. You carefully selected one or more individuals to manage and distribute your estate properly and delineated your beneficiaries such as your spouse, children, friends, and charitable organizations. If you are a business owner, you have also crafted a succession plan for your profitable business, which will likely survive and thrive in the event of your passing, as an estate plan. Kudos to you!

Estate Planning Is Not a “Set It and Forget It” Task

While you may love the subscription feature of many contemporary sellers such as Amazon, which allows the convenience of purchasing in advance and the comfort of knowing that your order will arrive on your doorstep with reliable regularity, keeping your estate plan fresh doesn’t work that way. If you engage a competent and proactive law firm to create your Living Trust, you may receive consistent reminders to consider any necessary changes in estate planning. But even the best attorney cannot read minds and may not realize that your financial or personal scenario has shifted dramatically. It is up to you to make sure your estate plan reflects your current wishes as time marches forward.

The Top Ten Reasons To Update Your Will, Trust, and Other Estate Planning Documents

  1. Divorce: If you are in the process of divorcing your spouse, or your divorce is final, it is vital that you seek an estate planning attorney to advise you during estate planning and update documents. Your unforeseen or premature death could necessitate a default to the estate plan you created with your former spouse, making him or her the beneficiary of your estate and the manager of your healthcare decisions by estate planning law. Obviously, you may find this to be highly undesirable, so don’t skip this crucial step.
  2. Marriage: On the brighter side, it is also necessary to recalibrate the terms of your estate plan if you’ve tied the knot, especially if it is a second or third marriage with separate kids. Even if you don’t decide to leave your new spouse any portion of your assets during estate planning, spell this out in writing.
  3. Changes in health: If you or your spouse has a serious medical diagnosis or is experiencing a worsening condition, this may be the perfect time to review your current trustee and beneficiary designations, as well as your estate plan, and consider potential revisions.
  4. Real estate acquisitions or refinances: If you have expanded your estate by purchasing homes, land, rental, or vacation properties, these should be titled in the name of your trust, which is often overlooked in the excitement and stress of completing such purchases.
    When refinancing a property, some lenders require that the property is transferred from your Living Trust to your individual name to qualify for the refinance. Make sure that this property is titled back in the name of your Trust at closing, or contact your estate planning attorney to do it for you.
  5. Births and adoptions: If you, or your adult child, has a baby or legally adopts a child, this is a key reason to rethink the apportionment of your assets in your estate plan.
  6. Passage of time: It is easy for the years to slip by without realizing that the person you designated as Trustee is no longer your friend or has moved out of the country, for example. This outdated selection is no longer viable, so it is wise to proactively replace the Trustee in estate planning, avoiding confusion and additional hurdles if you lose capacity or pass away.
  7. Children grow up: A minor child reaching adulthood may prompt you to elevate them to Trustee status, which is possible under estate planning law. Alternatively, you may wish to delay their inheritance until they’ve finished college or reached a more advanced age and maturity level.
  8. Making a move: If you have relocated to another state, this is an optimal time to review your estate planning for relevancy and to update state-specific documents such as your Advance Health Care Directive. Identify a local attorney who is knowledgeable about estate planning matters.
  9. Tax law: The estate tax landscape sometimes seems to consist of shifting sands. Especially if your estate planning is more than ten or twenty years old, the current climate may be vastly different than it was when the Trust was initially crafted. Raise these issues with both your tax and legal professional.
  10. Death of beneficiary: If one of your primary beneficiaries is deceased, check to see who is named as a backup beneficiary and determine if this still fits your desired outcome.

Why It Is Important to Update Your Estate Planning Documents

One of the chief features of estate planning is that it often details property in the letter. This practice arose from the need for crystal clarity when you create an estate plan. This feature, which is a renowned benefit of the legal administration of the estate, may just as easily become the bane of your carefully crafted estate plan. Since the detailing is expressed in writing, it becomes rather vital for adjustments and amendments to be executed on the documents. The amendments could be as a result of a recent marriage or divorce, a new birth or death, acquisition or liquidation of assets, and even relocation. The list could potentially be unlimited. Yet, why is it important to affect every change in your estate planning documents?

  • It ensures the estate plan covers your intentions as regards all your property.
  • It keeps the estate documentation up to date with the correct parties to your estate plan –– executors and beneficiaries.
  • It keeps your documentation compliant with changing government regulations, such as tax policies.
  • It conveys the appropriate responsibilities and privileges to each party based on changes in the relationship with you.

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A Final Word

It is important to note that if your spouse passes away, a consultation with an attorney is in order. There are often important documents to prepare and sign, legal and tax advice to consider, and there may be other necessary steps, such as notifying beneficiaries. You do not have an obligation to refer to the attorney who drafted the original estate plan, you may retain any attorney you like.

Article by Zakiya J. Norton and Somita Basu

Zakiya J. Norton is a big-picture thinker who practices with precision, sharp insight and a touch of humor. Zakiya delivers innovative, top-notch advice in terms everyone can understand. Known for her ability to grasp the family history and personal intentions which inform each estate plan, she offers compassionate counsel and no-nonsense legal strategies in her affable, straightforward speaking style.

Somita Basu has a knack for unraveling legal, financial, and mathematical mysteries while paying meticulous attention to detail. Always analytical and objective, her tactical methods allow her to identify the optimal way to achieve any goal. With a thorough, hands-on approach, Somita expertly advises on complex matters with diligence and grace.

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