In last month’s blog we discussed the importance of protecting your digital assets by including items such as social media, cloud storage, crypto investment and others in your estate plan. After diving into what items should be considered in your estate plan, understanding and planning on the longevity of your plan are next.
Forming a comprehensive estate plan is not a one-and-done activity; your estate plan should be a fluid arrangement that adjusts to the ever-evolving circumstances of your life. It’s important to recognize when you should change your estate plan and take the appropriate steps to properly secure your and your family’s legacy throughout your life and its many seasons.
When to Update Your Estate Plan
Major Life Events that Should Prompt Review of Your Plan
Major life events like marriage, divorce, births, and deaths within your family or key relationships should prompt a review of your plan. Similarly, if you or a beneficiary becomes disabled or, in the case of a beneficiary, incompetent to manage one’s affairs, you should also review your current estate plan. These events likely reshape your priorities, needs, and wishes and require adjustments to your beneficiaries, executors, agents, and overall arrangements.
Moving to a different state or country should also prompt you to review your estate plan, as this can have legal and financial implications for your plan. Laws regarding wills, trusts, and estate taxes vary, so it’s essential to ensure your plan complies with the laws of your current jurisdiction and that certain arrangements will continue to have the same desired impact. Conversely, moving may add considerations to plan for (for example, if you move from a jurisdiction with no state estate tax to a state with a state estate tax).
Change in Financial Status that Should Prompt Review of Your Plan
If you’ve purchased real estate, started or sold a business, or inherited money, you should review your estate plan. Any significant change to your financial situation, such as a substantial increase or decrease in assets, may necessitate modifications to your estate plan. This could involve updating distribution instructions or considering new tax-saving strategies.
What Are the Consequences of Neglecting Your Estate Plan?
Failing to update your estate plan can lead to a number of undesired consequences. For example, suppose you, like many people, select your spouse and a parent as the executor and successor executor of your will. If they both pass away before you and you don’t update your estate plan, this likely leaves vital roles in your estate plan—for example, the executor—vacant. Upon your death, this vacancy would leave your children or their legal guardians burdened with appealing to a court to appoint an executor, thus further complicating an already long and arduous probate process. At best this will result in delay, at worst it leads to familial conflict.
Everything from real estate law to tax law can impact your estate plan. As laws will regularly change over your lifetime, you should periodically ensure that elements of your estate plan don’t become inefficient, obsolete, or even damaging. Failing to adjust your estate plan can have substantial consequences to your estate, from unexpected taxes to losing eligibility to government benefits.
Seek Guidance for Your Ongoing Estate Planning Journey
Skufca Law is here to help you navigate your ongoing estate planning journey, providing guidance and support to ensure your estate plan remains an accurate reflection of your wishes. Contact the attorneys at Skufca Law at (704) 376-3030 to discuss how you can build and maintain a lasting estate plan.
Coming up next: Our last blog in our Estate Planning Series explores some popular estate planning questions and answers, stay tuned.