By Libby Banks
Change is inevitable. With estate planning, you put in place the best plan you can at the time. However, as changes come in your life and in the law, your plan may need some changes too. So when should you review – and possibly renew – your estate plan?
Changes in the Law
One change that can make a difference in your plan isn’t even something you brought about. Federal or state laws may change, necessitating a change to your plan.
In Arizona, the trust code changed in 2008. If your Trust was put in place before 2008, a review is a very good idea, because the law on which it was based is now very different.
In addition, the federal estate tax exemption is now $11.4 Million per person. Your estate plan might have been put in place when the exemption was much lower, and you needed a complex plan to avoid the 40 percent estate tax. Now, you may not need that complex planning, and putting a far simpler plan in place will make it easier for your surviving spouse and children to administer.
The Big Four of Life Events – Marriage, Divorce, Birth and Death
It seems obvious that if you get divorced, you need to change your plan. Yet often, a client comes to me years after marrying with a plan that doesn’t even mention their spouse. I’ve also had to console the spouse who finds out too late that her husband failed to change his will, and also forgot to change life insurance or IRA beneficiaries. When you leave a marriage, put new estate planning documents in place.
If you are getting married, it’s important to put a plan in place too. Now you have a spouse to consider in the mix. If this is a second marriage and you have children from a prior marriage, your plan needs to account for that – and provide for what you want to happen.
The birth of a child is also an occasion to change your plan or put one in place if you haven’t done so yet. You need to protect that life you brought into the world. Protection includes making sure things are in place for their care if you are no longer here.
Moving from State to State
Another significant life event is a move to another state. While your attorney in your old state may have done a fine job, it is important to be sure that your new home state doesn’t have laws that affect your plan adversely. A local attorney can advise you about whether your existing plan requires changes.
A Review Every Three to Five Years
I recommend that my clients review their trusts with me every three to five years. This way, we can discuss any changes in their lives and in the law and update to be sure the plan is what is needed.
If I can help you, let me know! You can find my contact information at www.LibbyBanks.com
