Your estate planning documents, and especially your Last Will and Testament (Will) and any trusts you have created, are living documents that need regular maintenance. As your life and circumstances change over time, your estate planning documents must be periodically updated to make sure they continue to reflect your current life circumstances and your wishes about how your assets will be transferred upon your death.
While it is wise to perform a periodic “check-up” on your estate plan, there are a number of life-changing events that can significantly impact your estate plan. When these life events occur, you should speak with estate planning attorney Bill Ager, to ensure that your estate planning documents continue to reflect your wishes.
The birth or adoption of a child or grandchild is wonderful news. It is also a good time to update your estate plan to include the new addition to your family. You may need to add provisions to your plan that name a guardian for your children in the event something happens to you and your spouse, a trustee to manage your trust, if you have one, or change beneficiaries on your Will, trust, or insurance policies.
If you are considering or were recently divorced, you need to update your estate plan so your former spouse is no longer the named beneficiary under your Will, trust, retirement accounts, and other assets. If you changed your name after your divorce, you may also need to change your name on your estate planning documents.
If one of your children was recently divorced, you may need to change beneficiary designations, create trusts, or make other changes to your estate plan to protect your child and prevent their former spouse from receiving your estate assets.
If you have not reviewed your Will or trust since your children turned 18, it is time to update your Will and other estate planning documents. Once a child reaches 18 years of age, they no longer need to have a guardian named in your Will. However, you may consider creating a trust to limit the estate assets a young adult can access.
If you started a business, it is wise to revisit your estate plan and re-evaluate it in light of your new circumstances. Small business owners often take on greater financial risk and more debt obligations. As a result, you should take steps to protect your business and your family in the event that you become incapacitated. You may consider a buy-sell agreement and other business succession planning documents to protect both your business and your family. You can also make decisions about who will inherit your interest in the company and whether you want them to have a role in running the business.
If the value of your estate has undergone a significant increase or decrease in value, you should take a closer look at your Will or trust. You may consider changing contributions to a retirement plan or a younger family member’s 529 college savings plan, or re-evaluate how much money you will leave to certain people or charities.
If the people named in your estate plan as your personal representative, guardian, or trustee have experienced a change in their circumstances, you may need to update your estate plan. Perhaps the person you named as your guardian, trustee, or personal representative has passed away or now lacks the capacity to serve. Or perhaps they have struggled with mental health or substance issues and are no longer fit to serve as your representative. While many estate plans address these contingencies, it is wise to re-evaluate your estate plan in light of changing circumstances.
Tax laws are constantly changing. You should try to remain aware of changes to tax laws that will impact you and your estate plan. If you hear about a potential change to a tax law or retirement law that could have an impact on your estate plan, you should contact your attorney to ask how the law will affect you and whether you need to make any changes.
In addition to your Will and trust, you may have life insurance, IRAs, annuities, and retirement plans as part of your estate plan. Many of these assets are not transferred through your Will but instead have designated beneficiaries. As you approach the age where you will start taking distributions from some of these accounts, re-evaluate the state of your estate plan to ensure that it will serve you as you change from funding your retirement plan to withdrawing from it.
Since first writing your Will or trust your views may have changed, or you may have become more (or less) involved with a charity or other non-profit. If you wish to choose to leave money to an organization or wish to change the organization you which to leave money to, you need to update your Will or trust to reflect your evolving views and activities.
If you move to or from Michigan, you should consult an attorney in your new location to make sure your Will or trust is still valid, and make any updates so your estate planning documents comply with laws in your new location. It is possible that laws in your new state differ from those in your old state, and re-evaluating your estate plan can help avoid problems in the future.
If your life circumstances have changed and you need to update your Will, trust, or other aspects of your estate plan, an experienced estate planning attorney can help. Bill Ager, offers reasonable flat fees for estate planning services. To speak with Bill about updating your estate plan, call (734) 649-0784, email email@example.com, or use our online contact form.