Despite understanding the importance of estate planning, over half of all Americans do not have an estate plan in place. If you among the minority, and you have created an estate plan, you are a step ahead of the majority. Do not then make the mistake of never revisiting and revising your plan. Not having an estate plan in place makes probating your estate difficult; however, having an outdated plan in place can be just as problematic. To help you make the most out of your estate plan, the Vero Beach estate planning lawyers at Kulas & Crawford, explain when and why you should update your estate plan.
Updating Your Initial Estate Plan
If you are like most people, your initial estate plan will be fairly basic. In fact, it may not include anything more than a simple Last Will and Testament. While that is certainly a good start, a Will cannot accomplish everything that a comprehensive estate plan can, and should, accomplish. Our lives rarely remain the same year after year. As you move through the stages of your life, the people and things in your life are likely to change. For this reason, all estate plans should be updated on a regular basis so that your current plan reflects your current needs and wishes. Although there are no hard and fast rules dictating when you should review your estate plan as a matter of course, most estate planning attorneys suggest reviewing your plan every three or four years until you reach about age 40-45. For most people, the most dramatic changes (marriage, children, job changes) in their lives occur during those years. From that point until you retire you should be able to get by with reviewing your plan every five years or so. Once you reach your retirement years, a routine review every seven to ten years is sufficient. These timelines, however, assume that there are no life events that warrant a more immediate review.
Life Events that Require an Immediate Review and Revision
Along with routine reviews, there are also a number of life events that should precipitate a review and revision of your estate plan, including:
- Marriage – when you marry, you typically need to change the beneficiary designations on things such as your Will, retirement plans, and life insurance policies.
- Divorce – divorce can be a very stressful time; however, do not make the mistake of forgetting to make changes to your estate plan or you could end up with an ex-spouse as the beneficiary of your estate assets.
- Birth of a child – not only will you want to add your child as a beneficiary, but you may also need to create a trust to protect your child’s inheritance because a minor cannot inherit directly from your estate.
- Youngest child reaches adulthood – once all your children are legal adults, you have the option to gift directly to them instead of counting on a trust.
- Death – the death of a beneficiary certainly calls for a review of your plan; however, so does the death of someone in a fiduciary role, such as a Trustee.
- Move to another state – many of the laws that govern your estate plan are state specific. Therefore, if you move to another state, you need to consult with an estate planning attorney in that state to make sure you do not need to revise anything in your plan.
- Significant change in assets – minor changes should be accounted for in your plan; however, if you buy or sell a business, or valuable asset, you may need to review your estate plan.
- Retirement – when you reach retirement, you may start to withdraw funds from retirement accounts which can cause the need to revise your estate plan. You should also make sure that Medicaid planning is part of your estate plan when you enter your retirement years.
Contact Vero Beach Estate Planning Lawyers
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding when and why you should update your estate plan, contact the experienced Florida estate planning attorneys at Kulas & Crawford by calling (772) 778-8481 to schedule an appointment.
