You might think that you have done the work of creating an estate plan – you combed through your assets, made tough choices about beneficiaries, executors and guardians for your minor children – and now you can close the book on that task forever. However, you may find that before you know it, several years have passed and some things in your life have changed. You realize that it may be time to take a second look at your estate planning documents.
Do I Need to Update My Estate Plan?
There are many reasons to review your estate plan, the number one reason being the passage of time. Everyone should review their estate plan and each included document at least every three to five years. In addition to a periodic review, you should review your estate planning documents after major life events. Maybe you have inherited something yourself, purchased real estate, or started a business. Maybe you had children, moved from your home state, or liquidated an asset that could potentially leave an intended beneficiary with nothing. If you have had any of the following changes in life circumstances, you should pull out your estate planning documents and review them with your estate planning attorney:
- Marriage or divorce: When you get married, you will likely want to create a new Last Will and Testament and update your beneficiary designations to include your new spouse. While New York law provides that your spouse is entitled to a minimum portion of your estate regardless of what your estate plan says, you will likely want them to receive more than the state requires. Conversely, after a divorce, any provisions including your spouse will be voided from your will. However, this does not include gifts to or nominations of relatives of your former spouse. Therefore, it is important to revisit your documents after a divorce.
- Birth of a child: The birth of a couple’s first child is very often the reason most people create their first estate plan. Upon the birth of any child, you should review your beneficiary designations and make sure to appoint a Guardian for your child in the event you should pass away while he or she is still a minor.
- Death of a spouse or beneficiary: You should always be sure to review your own estate plan on the death of your spouse. Your spouse is commonly your primary beneficiary and he or she is likely named as your executor. Now is the time to take a look and confirm whether your back up executor is still the best choice and if your contingent beneficiaries are still who you would like to receive your property on your death.
- Your wishes have changed about beneficiaries or fiduciaries: You should be giving periodic consideration to your named fiduciaries. This refers to the people you have nominated to serve as your Executor, Trustee and even your minor children’s Guardian and the Agent under your Power of Attorney. Do you still have good relationships with those you have named? Do you still believe that they are qualified to serve in their positions? Have any of them moved recently?
- Changes to the tax laws: Laws are always changing and that includes the estate tax laws. The Federal government imposes an estate tax and some states, including New York, impose their own separate estate or inheritance tax. You should be aware of changing tax laws and a review of your estate plan should always be conducted to see how or if you may be impacted.
- Major change in your assets: Have you started a new business or created a new business entity? If so, your estate plan should be reviewed to see whether it is set up the best way to distribute your new asset. Perhaps when you created your estate plan, you did not have a taxable estate but due to a financial success, you may now have to consider estate taxes when making decisions about your estate plan.
- You have recently moved: Estate planning laws are largely state specific. For example, some states, such as New York, impose an estate or inheritance tax, while others simply do not. If you created your estate plan while living in one state and later move to another, it is important to speak to an estate planning attorney in your new state to make sure that all of your documents remain effective, and that they still accomplish your goals.
- Change in health status: If there has been a significant change to your health you should give your estate planning attorney a call. Perhaps you should now be thinking about asset protection or Medicaid planning to plan for your long term care needs. You should also review your documents upon the diagnosis of any of your intended beneficiaries with a disability as you can make special provisions in your documents to make sure that any inheritance from you will not disrupt any government benefits your beneficiary might otherwise be eligible for.
There are many reasons you may want to change your estate plan and therefore it is important to periodically review your documents with a qualified estate planning attorney. Call the Law Offices of Roman Aminov, P.C. to discuss your estate plan today.
Law Offices Of Roman Aminov 147-17 Union Turnpike, Flushing, NY 11367 (347) 766-2685
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