CHECKLIST: Does Your Outdated Estate Plan Reflect Your Life Today?

Estate planning is meant to give you a sense of control over where the wealth you have cultivated over a lifetime will go once you pass on.

While historically, people with great fortunes often believed being buried with their treasures would give them a better afterlife, we know that our material possessions are not much use to us personally when we are gone – but they can certainly help our family continue to prosper without us, giving our descendants the funds they need to kickstart their own legacy, and leaving something behind to represent what we achieved long after our last breath.

Poetically and practically, having a solid estate plan is important. However, an estate plan is not really something you set up once, hack off your bucket list, and then forget until the time comes to pass on. Estate plans evolve continuously, requiring updates to ensure they are relevant to your current lifestyle, circumstances, and the laws and financial context of today. Even if you have updated your estate plan quite “recently” (in the last five years or so), here are a few concerns you may want to address the next time you give your estate plan a once-over.

Estate Planning Is Continuous

Life rarely goes as planned. When we are young, we have dreams and ambitions. Even if we go on to fulfill them, the journey to said goal is never what we expect – and oftentimes, our goals and priorities completely change midway through our “path”. Indeed, if life is anything, it is fluid.

And the ability to be flexible and adaptive in the face of life’s changes and challenges is important for any real plan. Plans are always drafts – never is a life plan “complete”, it is simply waiting for the next change. It is a good idea to treat your estate plan the same way – instead of creating a final document, a “last will” if you would like, think of this estate plan as a draft for what may one day be the real last estate plan, one you might not come to expect.

How Often Should You Update Your Estate Plan?

There are two general rules of thumb when it comes to the frequency of estate plan adjustments. The first is to adjust your estate plan whenever something happens, something that carries enough significance and consequence to push you to change your plan. It could be a family tragedy or a family celebration, or the acquisition of a particularly large asset.

The other rule of thumb is to sit down with a professional and review your estate plan every three to five years, going over the details, current tax laws, any intermittent changes, and significant considerations to apply to your new iteration.

Speaking of considerations and changes, it helps to have a checklist. Here are a few questions you may want to ask yourself when you sit down to change your estate plan.

Is Your Estate Plan Tax-Proof for Today?

As presidencies change and tax bills expire, new changes are made, changes that affect all Americans. President Trump’s tax bill from 2017 made major changes to the way itemized and standard deductions worked – but he also doubled exemptions for the estate tax until 2025, after much talk and criticism of what many call the “death tax”.

This change is great on paper, yet it may also present some anxiety to wealthy retirees. While the change allows for a complete revamp of estate plans and major gains, it may also get thrown out for completely new limits in less than seven years’ time, in which you may very well still be alive.

However, life is unpredictable, and anything could happen. Keeping your estate plan updated to reflect current tax laws is necessary, even if you may have to go through the trouble of changing your plans again when a new tax bill goes into effect.

Does Your Estate Plan Reflect Your Current Goals, Requirements?

Death, divorce, birth, marriage, and many other changes in the family may very well change the circumstances under which you originally created and planned your estate plan. Children that may once have been young and irresponsible have grown up into successful and ambitious adults, while other family members whom you once trusted may have fallen out of favor, their lives in disarray.

Even if you update your estate regularly, consider taking time out of your life to review and make immediate changes after a significant change in your family’s life.

Do You Trust Your Trustee?

Your trustee/fiduciary is critical. They are the person in charge of executing your will/trust/estate plan once you pass away and having full faith in them and their abilities is important if you want your fortune to be accurately distributed between your friends and loved ones.

If possible, avoid hiring a professional to act as trustee/executor, unless they are deeply trusted. Even then, be sure to keep them and your plan updated. They may have changed states or stopped practicing. When naming a family member, make sure that they are still ready and up for the task.

What State Was Your Initial Estate Plan Drafted In?

Moving from one state to another can be a logistical ordeal, but it can also drastically affect your estate plans. Estate planning considerations include the numerous state-specific tax and estate laws – for example, the effects of divorce in one state may be completely different in another, and while some states do not have any state estate taxes on top of the federal estate tax (like California), others do.

If you recently moved your address to a new state, then contact a local estate professional to go over your plan and make sure everything is applicable.

Estate Planning and Charitable Giving

A long life filled with great opportunities and greater fortunes are almost always the result of very hard work, and some favorable circumstances. For some, age gives them the perspective that their fortunes may not only help their kin, but others struggling under completely different circumstances, such as diseases without cures, or a lack of opportunity at home and in the community.

Select charities can do a lot of good in the world but need the funding to do their work. If you are already supporting a charitable effort but want to ensure that some of your wealth continues to go towards helping others achieve some prosperity and find their own happiness, then a charitable trust may be just what you need. Separate from other trusts and estate planning tools, you can set up a charitable trust to designate a part of your estate specifically to said charity, or several charitable organizations.

As life changes, so do we – perspectives shift, priorities are altered, philosophies evolve, and we continue to surprise ourselves and others. You can do a lot with a proper estate plan, and by keeping yours regularly updated, you will never have to worry that you passing away may somehow leave your family financially unprepared or swamped in unnecessary paperwork at a time of grief and loss.

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