Does your estate plan still work?
By Austin Cortez
By Austin Cortez
Change is inevitable. And when it occurs, your estate plan must change as well. Most of us have been told that we should go to the doctor once a year for a checkup. We know the car oil needs changed every 3,000 miles or so. However, unlike our health and our cars, few of us consider when it is time to have a checkup on our estate plans, or what kind of changes may be necessary.
Keeping your estate plan updated is just as important as having any kind of plan at all. Too often people will create estate-planning documents and then unconsciously stash those documents in a place not easily accessible or otherwise often used (i.e., a safe, safety deposit box, etc.). Consequently, these invaluable estate planning documents are inevitably forgotten until it is too late.
Many people go through life changes, and their plan should reflect the new situation. Various milestones make it necessary to update your estate plan. Examples include the following: marriage or divorce, children becoming adults, children having babies, the buying or selling of property and the acquisition of different financial instruments.
A review of your estate plan will ensure it still mirrors your intentions and successfully protects you and your family. Outside of major life changes like the ones outlined above, there are even more practical reasons, like changes in the law. For example, a significant factor that is often overlooked is the change to Ohio and federal estate taxes. While the federal estate tax exemption is significant, we also have a mounting deficit that someone will have to pay. If the federal government lowers the exemption amount and increases the estate tax, how will you know?
In addition to when you experience major life changes, you should also consider periodically reviewing your estate plan. Once every couple of years is a good rule of thumb. By doing so, you will have an opportunity to review your plan and make adjustments based upon changes in life circumstances and related goals. To the extent that no changes are needed, you will have peace of mind that your estate planning documents are updated and current.