Summary: There are many events in life
that may be indicative of the need to get your estate plan reviewed and
possibly updated. While many people recognize the birth children or retirement
as events that highlight the need for a plan review, your plan probably needs
reviewing much more frequently than that. Events ranging from divorces, deaths,
catastrophic injuries, out-of-state moves and changes in the law are all things
that may mean that you need a plan update to keep your plan optimized to
accomplish your goals.
An attorney from Michigan wrote a column
recently for the Port Huron, Mich. newspaper. In that article, the author
stated that he'd read that, according to recent survey research, "the
average time between estate plan updates was almost 20 years." As the author
pointed out, this result is intuitively not totally surprising. When you look
at the type of life events that take place in many families' lives, they can
tend to take place in roughly 20-year intervals. A couple might create a plan
once they've had children. They might update their plan once their children
have achieved adulthood, left home and got married and/or had kids of their
own. In many cases, this latter list occurs about two decades or so after a
couple initially had their kids. Roughly two decades after that, most couples
have retired and update their plans accordingly.
While this is a common approach, it is,
for most people, not an optimal one. Many legal experts agree that a properly
maintained estate plan will need updating far more often than just every 20
years. That's because there are many things beyond just your having kids, your
kids getting married, your having grandchildren or your entering retirement
that may trigger a need for a plan update. Here's a quick rundown of events that
might mean that an update is in order for your plan:
(1) Divorces. Sure, births and marriages are
important events that may point to the need to update your plan. But they are
not the only ones. If you get divorced, that would obviously indicate that a plan
review (and likely some updates) are needed in order to ensure that you're not
leaving wealth to someone you no longer desire to include in your legacy or (if
perhaps you've remained close with your "ex") excluded someone you
did want to leave something. If your child gets divorced, that may also mean
that you need a review and maybe an update. Did you include your (now former)
son- or daughter-in-law in your plan? Did you do so by name? If you did and you
no longer want to, or if you still want to but did not name that person by
name, you may need an update.
(2) Deaths. Death unfortunately is a part of life.
Sometimes people in our lives die unexpectedly and prematurely. When those
events happen, they can impact your plan. If one of your beneficiaries dies
before you, you'll probably want to investigate making an update. This can be
especially true if that person is a child, so that you can clearly instruct
what happens to his/her share. Should that wealth go his/her children, split
between your other children (his/her siblings) or distributed elsewhere? Also,
if one of your personal representatives or successor trustees has just died,
even if that person was only an alternate trustee or personal representative,
you may desire to update your plan to add someone new to your list of
fiduciaries. That way, you can remain just as protected as you were against
future unexpected events leaving you without someone named.
(3) Catastrophic injuries. A major injury to a loved may have a
substantial impact on your plan, as it may mean you need significant changes in
order to meet your goals. If you've left a distribution in your plan to someone
who has suffered an injury/illness and now receives needs-based government
benefits, you'll want to explore an update. Leaving your plan unchanged, and
leaving a distribution outright to that beneficiary, could force him/her into
the difficult position of possibly having to disclaim that distribution or,
worse, losing his/her eligibility to continue receiving benefits. With a proper
update, which may include a Supplemental Needs Trust, you can include that
person in your plans and not risk creating a loss of benefits.
(4) A move out of state. The laws regarding estate planning are
different from state to state by varying degrees. Some states' laws are very
similar to others, while others are significantly different. Because of this
wide degree of variability, whether or not you'll need an update (and how much
of an update you'll need) depends on where you're moving from and what state
you're moving to. Regardless of the states involved, it is a good idea to get a
plan review. Even if you only need a very minor update (or even no update at
all,) it is beneficial to make sure that the out-of-state move you've completed
won't cause you any problems later on.
(5) Legal changes. Changes in the law can be good, bad or
neither. The only way to find out is to have your plan reviewed. If the change
is good, then an update can allow you take advantage of the change. If it is
bad, then an update can help you minimize or avoid the negative impact of the
new laws.
This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com.
This article written and published by:
8039 Cooper Creek Blvd
University Park, Florida 34201
844.306.5272 (Phone)
Click Below To See Other Legacy Assurance Plan Related Sites:
