IS YOUR ESTATE PLAN UP TO DATE?
This year, Estate Planning Awareness Week runs from October 17-23, 2022, and one of our primary goals is to educate you on the vital importance of not only preparing an estate plan, but also keeping your plan up to date. We hope you already understand the importance of creating an estate plan, but you may not know that keeping your plan current is every bit as important as creating a plan to begin with.
In fact, outside of not creating any estate plan at all, outdated estate plans are one of the most common estate planning mistakes we encounter. We will get called by the loved ones of someone who has become incapacitated or died with a plan that no longer works because it was not properly updated. Unfortunately, once something happens, it is too late to adjust your plan. What’s worse, the loved ones you leave behind will be stuck with the mess you have left, or they could end up in a costly and traumatic court process that can drag out for months or even years.
Estate planning is an ongoing process, not a one-and-done type of deal. To ensure your plan works properly, it should continuously evolve along with your life circumstances and other changing conditions. Regardless of who you are, your life will inevitably change – families change, assets change, laws change, and goals change.
In the absence of any major life events, we recommend reviewing your estate plan annually. However, there are several common life events that require you to immediately update your plan—that is, if you want it to actually work and keep your family out of court and out of conflict.
If any of the following events occur in your life, contact an estate planning lawyer right away to amend your estate plan.
LIFE EVENTS THAT NECESSITATE AN IMMEDIATE REVIEW OF YOUR ESTATE PLAN
01 | You get married:
Marriage not only changes your relationship status; it changes your legal status. Regardless of whether it is your first marriage or fourth, you must take the proper steps to ensure your estate plan properly reflects your current wishes and needs.
After tying the knot, some of your most pressing concerns include naming your new spouse as a beneficiary on your insurance policies and retirement accounts, granting him or her Medical Power of Attorney and/or Durable Financial Power of Attorney (if that is your wish), and adding him or her to your will and/or trust.
02 | You get divorced:
Because divorce is such a stressful process, estate planning often gets overshadowed by the other dramatic changes happening. However, failing to update your plan for divorce can have terrible consequences.
Once divorce proceedings start, you will need to ensure your future ex is no longer eligible to receive any of your assets or make financial and medical decisions on your behalf—unless that is your wish. Once the divorce is finalized and your property is divided, you will need to adjust your estate plan to match your new asset profile and living situation.
03 | You give birth or adopt:
Welcoming a new addition to your family can be a joyous occasion, but it also demands entirely new levels of planning and responsibility. At the top of your to-do list should be legally naming both long and short-term guardians for your child. Our For the Kids Plan™ offers everything you need to complete this process right now.
Once you have named legal guardians for your minor kids, consider putting in place other estate planning vehicles, such as a Revocable Living Trust.These planning tools can make certain the assets you want your child to inherit will be passed on in the most effective and beneficial way possible for everyone involved. Consult with an estate planning lawyer to determine which planning strategies are best suited for your family situation.
04 | You have a minor child reach the age of majority:
Once your kids become legal adults—which is age 18 in Florida—many areas of their life that were once under your control will become entirely their responsibility. If your kids do not have the proper legal documents in place, you could face a costly and traumatic ordeal should something happen to them.
For instance, if your child were to get into a serious car accident and require hospitalization, you would no longer have the automatic authority to make decisions about his or her medical treatment or the ability to manage their financial affairs. Without legal documentation, you would not even be able to access your child’s medical records or bank accounts without a court order.
To prevent your family from going through an expensive and unnecessary court process, speak with your kids about the importance of estate planning, and meet with an estate planning lawyer to ensure they have the proper legal documents in place as they start their journey into adulthood.
05 | A loved one dies:
The death of a family member, partner, or close friend can have serious consequences for both your life and estate plan. If the deceased person was included in your plan, you need to update it accordingly to fill any gaps his or her death may create. From naming new beneficiaries, executors, and guardians to identifying new heirs to receive assets allocated to the deceased, make sure your plan addresses all voids created by a death in the family as soon as possible.
06 | You get seriously ill or injured:
As with death, illness and injury are an unavoidable part of life. If you have been diagnosed with a serious illness or are involved in a life-changing accident, you may want to review the people you have chosen to handle your medical decisions as well as how those decisions should be made. The person you want to serve as your healthcare proxy can change with time, so be sure your plan reflects your current wishes.
07 | You move to a new state:
Estate planning laws can vary widely from state to state, so if you move to a different state, you will need to review and/or revise your plan to ensure it complies with your new home’s legal requirements. Because some estate planning laws are complex, you will want to meet with an estate planning lawyer in the state you intend to move and reside in to make certain your plan will still work exactly as you desire in your new location.
08 | Your assets or liability change significantly:
Whenever the value of your estate changes dramatically—whether an increase or decrease, or even just the acquisition or sale of assets— you should revisit and update your plan. Whether you inherit a fortune, take out a new loan, retire, sell a home or business, buy a home or business, or change your investment portfolio, your plan should be adjusted accordingly.
09 | You buy or sell a business:
If you plan to sell a business, you can implement estate planning strategies to avoid almost all of your taxes—as long as you contact us ahead of time. Of course, if you are buying a business, you will want to ensure your plan is updated to take into account your succession plans for the new venture.
For every business you own, you should consider creating a buy-sell agreement and a business succession plan to protect both your business and your family in case something happens to you. In your plan, you can not only decide who will take over your role as the company’s owner should something happen to you, but you can also provide him or her with a detailed road map for how the business should be run in your absence with a comprehensive business succession plan.
10 | The Federal Estate Tax Exemption changes significantly:
Anytime the federal estate-tax exemption changes dramatically, we recommend you review your financial assets and your estate plan. NOTE: Florida does not have state death taxes, but we are subjected to the Federal death tax laws.
Tax laws are constantly changing, so you should consult with an estate planning lawyer to ensure you are achieving the maximum tax savings possible and your investments are still aligned with your strategic goals in light of the latest changes to the tax code.
OUR SYSTEMS KEEP YOUR PLAN UPDATED...FOR LIFE
Keeping your estate plan updated is so important that we have created proprietary systems designed to ensure your plan is revisited consistently, so you do not need to worry about overlooking anything, as your family, the law, and your assets change over time. Furthermore, because your plan is designed to protect and provide for your loved ones in the event of your death or incapacity, we are here to serve not only you, but also your entire family.
Unlike traditional estate plans, a Life & Legacy Plan is designed to grow and change with you. We are not just a one-time document creator. We are your trusted, lifelong counsel. We work with you to ensure your family stays out of court and out of conflict and grows even closer as a result of the legacy you are creating.
LIFE & LEGACY PLANNING
As a Personal Family Lawyer® firm, our estate planning services go far beyond simply creating documents and then never seeing you again. In fact, we will develop a relationship with you and your family that lasts not only for your lifetime, but for the lifetime of your children and their children – if that is your wish.
Over the years, we will take the time to get to know your family members and include them in the planning process, so everyone affected by your plan is well-aware of what your latest planning strategies are and why you made the choices you did, along with knowing exactly what they need to do if something happens to you. If you are the parent of minor children, we will put safeguards in place to ensure that your kids are never placed into the care of strangers, even temporarily.
Ultimately, we have discovered that estate planning is about far more than planning for your death and passing on your “money and things” to your loved ones—it is about planning for a life you love and a legacy worth leaving by the choices you make today. Schedule a no-cost initial consultation with us to get your plan started today.