We All Need Checkups: Your Estate Plan Does Too

One reason for getting a regular physical is to detect and treat concerns before they become serious. Likewise, it is important for your estate plan to get a regular check up to address changes in your life circumstances or in the law. Like an undetected medical condition, an out-of-date estate plan can have devastating consequences.

No estate plan? An ounce of prevention is worth a pound of cure.

It is important to put plans in place to provide for yourself and your loved ones if something should happen to you. Although people often find it difficult to think about being too ill to care for their family or passing away, this discomfort is minor compared to what your family may have to endure if you do not have an estate plan in place.

If you do not have a medical power of attorney and you become incapacitated, the court may appoint someone to make those decisions for you. The court may also determine who will take care of your minor children. If you don’t have a will specifying who you want to receive your money and property, state law will decide who receives it.

If you do not have an estate plan—or if you only have a will—your property and money will have to go through an expensive, time-consuming, and public probate proceeding before finally being transferred to your loved ones. All of this can be avoided with estate planning!

Does your estate plan need to be reviewed? Make sure it has a clean bill of health.

Life—and the law—are in a constant state of change, so even if you already have an estate plan, it is important to meet with us regularly to review it and make sure it still serves your goals. The following are some of the changes that could trigger a need for modifications to your estate plan:

Changes in life circumstances

If there have been changes in your family relationships, such as marriages, divorces, or deaths, your estate plan should reflect that. You should also review the people you have named as your executor, trustee, guardian for your children, or agent under a power of attorney. Are still willing and able to fulfill those roles—and do you still have confidence in their ability to do so? If you have experienced financial changes, such as a substantial increase or decrease in the value or composition of your estate, there may be tax or other consequences that could impact your estate plan. Moving to a new state is another event that should trigger a review of your plan. Your estate planning documents may need to be modified or redone to ensure their validity under your new state’s law.

Changes in the law

The past couple of years provide a case in point for why everyone should regularly update their estate plans. Since the beginning of 2018, there have been massive changes in federal tax law affecting millions of Americans.

The most recent change is the enactment of the Setting Every Community Up For Retirement Enhancement Act (the “SECURE Act”), which became effective January 1, 2020. It benefits retirees by eliminating the maximum age for contributions to certain retirement accounts and increasing the age (from 70 ½ to 72) at which they are required to start taking distributions. However, it also eliminates the tax advantage previously available to many beneficiaries, who were able to take distributions from those accounts over their individual life expectancy.

Check up on your estate plan!

The consequences of failing to review your estate plan could be much worse than a quick check up. Call us today to set up a meeting so we can help you ensure that your estate plan is in the best of health! (614) 429-1053