Many people make the mistake of thinking that once they’ve prepared an estate plan (Will, Trust, and related documents) that they won’t ever have to change or update it. Remind clients that estate plans should be reviewed and updated on a regular basis. The following events may require an update of the estate plan.
- Change in marital status of anyone named in the will, including marriage, divorce, separation, or death. Both spouses should redo their plans with any change in marital status.
- Loss of a child or the addition of a child in the family, whether by birth or adoption. If the client has remarried and they now wish to leave something to new stepchildren, they will need to change their estate plan. If not legally adopted, stepchildren have no claim to any assets of a stepparent unless specified in estate planning documents.
- Move to a different state. The laws of different states can vary considerably. For example, community property and common law states differ on their views of property ownership. States have different tax rules. Couples should review their estate plans when they move from one state to another.
- Change in income or wealth of either the client or the beneficiary. The client may decide to change who gets what based on changes in their own circumstances or in the beneficiary’s. As the client acquires or disposes of property, he or she should review the plan to ensure those changes are taken into consideration. If the client is leaving all of the assets to one beneficiary, it may not be necessary for the client to make changes to the plan as the assets fluctuate in value.
- Major tax law changes. Major changes in tax laws can affect how much tax the client’s estate or beneficiary pays on property inherited from the client. The client will want to consider how those taxes will be paid.
Spring is an excellent time to meet with clients and suggest reviewing and updating their estate plans.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555
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