When it comes to estate planning, consistency is the key to success. That means you should review and update your estate plan in accordance with certain changes in your life. But how will you know when those changes occur? To help you figure out what frequency works best for you, here are some reasons why you should review and update your estate plan.
1. Change in Assets and Liabilities
If your estate’s value increases or decreases, it is time to initiate a review. This way, you can assess the changes in value and decide how to proceed from there. Along these same lines, you should review your estate if you have sold or purchased an asset that has a significant impact on the estate’s value.
2. Moving to Another State
Each state has its own set of laws pertaining to estate planning. Did you move to a state that has an inheritance tax? How about one that mandates that your spouse inherit a portion of the estate? These are critical stipulations that could drastically affect your estate plan. If this is the case, a review is probably in order.
Other areas of your estate plan that could be affected by moving to another state are powers of attorney, living wills, and several other crucial elements. You may want to consult with an estate planner to ensure you don’t miss anything. Your planner will be able to help you establish proof of residency in your new state. After all, you wouldn’t want to wind up being taxed in your old state because your residency was not properly updated.
3. Second Residency
In addition to moving, you should update your plan if you acquire a second residency in another state. Your estate planner should be able to help you determine which state to select as your principal residence. Additionally, they can assist with advanced medical directives and powers of attorney as it applies to the second state.
4. Appointing New Executors and Trustees
Executors and trustees are crucial to the implementation of your directives. Given the longevity required in estate planning, sometimes circumstances change. A person who was a great fit at earlier stages of planning may no longer fit the current topography, or an executor may have passed on or moved away. In these instances, you may want to consider appointing someone new before reviewing and updating your estate plan.
5. Removing Individuals From the Plan
In some circumstances, you might want to add or remove individuals from your estate plan. This usually happens when a baby is born, or you bring someone new into the family.
Conversely, you may want to remove individuals from your plan. If this is the case, consult with your estate planner to ensure the documents are properly revised, and the names of all parties are included or removed.
Updating Your Qualified Retirement Plan
If you have not consulted an estate planner yet, you may be overlooking a critical spot: beneficiary designations for your qualified retirement plans. Whether your plan involves an IRA, 401(k), or something else, the beneficiary designation adheres to what is included in the plan, not what is included in your will or trust.
Reviewing and updating your estate plan is a serious endeavor that requires a lot of time and focus. If you are just starting the process, consider consulting a qualified estate planner.
Our estate planners at Merlino & Gonzalez have a thorough understanding of the laws governing the Staten Island, NY, area. Reach out to us today to schedule an appointment with a qualified attorney.