When Should I Review My Estate Plan?
Estate planning laws have changed significantly and estate plan documents that you signed many years ago may not meet your current personal or financial objectives. A general rule of thumb is to review your estate at least every 3 to 4 years.
In addition, the following are events that may warrant a change in your estate plan:
- Births - When you have new children or grandchildren, you may want to consider redistribution of your estate or consider a trust, which may benefit them.
- Disability - Family members with special needs may require special planning. If you plan carefully, public assistance may be available.
- Deaths - The death of a family member or executor, personal representative, guardian, or trustee will also require changes in your estate plan.
- Marriage - The marriage of a child or other beneficiary may also require changes in your estate. What effect does the new member of the family have on your estate?
- Remarriage - You may wish to consider a trust for your children in the event of a remarriage. Your children may not be included in your estate should you remarry and predecease your new spouse.
- Non-Citizen Spouse - If your spouse is a non-citizen, they are treated differently under the U.S. tax law. It may be necessary with special tax planning, to transfer property to a non-citizen spouse during your life or upon your death.
- Divorce - Upon divorce, you should review your estate plan in order to know the effect that has upon your children's or other beneficiaries' inheritance. (For example, you named your divorced spouse as a beneficiary on your retirement plan or your life insurance.)
- Retirement - In addition to state and federal estate taxes, your retirement plan benefits may be taxed at death. You should look at the impact of this upon your estate plan.
- Moving to Another State - Different state laws and requirements may affect your estate plan documents and the distribution of your assets. Also, you may want to consider the administrative costs for witnesses and fiduciaries if they come from another state.
- Change in Size or Nature of Estate - If your estate has increased or decreased significantly, you should verify that this will not affect your estate planning objectives.
- Charity - If your family is provided for sufficiently, you may want to leave a portion of your estate to charity.
- Medical Care - Long-term medical care can be expensive. If someone in your family has serious health problems, you should review your estate plan.
- Tax Laws - There have been significant changes in the federal tax law over the past several years, which may affect you and the distribution of your estate and tax-saving opportunities.
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