Update Your Estate Plan

I recommend to my clients that they come in for an estate plan check-up every two years. An estate plan check-up is a time when I meet with my client, ask about what has changed in her life in the past two years, and describe what changes have taken place in the law that might affect her estate plan. After we have our conversation, I ask whether, in light of what we just spoke about, would my client want to change anything in her estate plan.

Usually, the answer is “yes.” Why? Because the laws affecting estate tax is changing fairly often these days and that impacts how your estate plan is structured. Frequently, in order to avoid paying estate tax to the state or the federal government, I will create one or more trusts in your will. A trust is a great device to get money out of your estate, and therefore not have to pay estate tax on it, but it can be a burden in terms of living with it. You have to file tax returns for the trust every year and sometimes prepare an accounting to the beneficiaries of the trust so they know how much was earned, through which investments, and how the income from the trust was distributed. A lot of extra work that you may not want to go through if you don’t need to.
On the other hand, maybe you never needed to think about estate taxes, but your mother died and left you a significant inheritance. Now you have some real money to think about. That can change your estate plan.

Your estate plan may change because you have had a big fight with your executor (or divorced him if it was your husband) and now you don’t want that person to act as your executor. Or perhaps the couple that you chose to be your children’s guardian have moved away from your neighborhood and your kids haven’t seen them in a few years. So you want to name a different guardian.

Your estate plan is never set in stone. It’s not a one-shot deal that you never have to re-think until someone dies. If it has been more than two years since you last talked to your estate lawyer, make an appointment now. You might find that you need to change more than you thought.