It doesn’t matter whether you have an estate plan or don’t,
one important item to add to your list is getting an estate plan checkup.
Don’t Have an Estate
Plan?
If you don’t already have an estate plan, then getting one in place should be at the top of your 2015 new year’s resolutions.
Why? Because without an estate plan, you and your property may end up in a court-supervised guardianship if you become incapacitated, and your property and your loved ones may end up in probate court after you die.
Worse yet, if you don’t take the time to make your own will, then the state where you live at the time of your death will essentially write one for you, and it most likely won’t divvy up your property the way you would have.
A common misconception is that estate planning is only necessary for wealthy people. But this simply isn’t true – anyone with a bank or a retirement account, a home, or a family needs to make a plan for what happens if they become incapacitated or when they die. Of course the complexity of a plan will vary depending on your circumstances, but all estate plans should be put together with the help of an attorney who is experienced with the legal formalities required to create a valid will, trust, health care directive, and power of attorney in your state.
How Old is Your
Estate Plan?
Do you already have an estate
plan?
If you do, then please pull
your documents out of the drawer, dust them off, and look at the date you
signed them.
Were your documents signed in
the 80s or 90s, or, worse yet, before 1980?
Then please run, don’t walk, to an estate planning attorney, because
your documents are terribly out of date and need to be brought into the new
millennium as soon as possible.
Did you sign your documents between
2000 and 2009? Aside from the federal
estate tax exemption jumping from $675,000 to $3,500,000 during that time
period, state estate taxes disappeared in many states. Because of the
significant changes in federal and state estate taxes, documents from this time
period can be out of date and need to be tweaked in some shape or form.
Did you sign your documents
during 2010, 2011, or 2012? Federal
estate taxes, gift taxes, and generation-skipping transfer taxes went through
major changes during these years, and “portability” of the federal estate tax
exemption between married couples was introduced. Unfortunately, while your estate planning
documents may only be a few years old, they very likely do not take advantage
of the opportunities made available from recent changes in federal tax laws. And, it’s not just tax laws that are changing
– modifications to state laws governing wills, trusts, health care directives,
and powers of attorney may warrant some revisions to your estate planning
documents as well.
And last but not least,
regardless of what year you signed your estate planning documents, think about all
of the changes in your life since you signed them. Did you get married or divorced, have a child
or two or a grandchild or two, or move to a new state? Did you sell your business, retire, have a
significant change in assets, or win the lottery? Any major changes in your family or financial
situation will certainly have an affect on your estate plan.
Estate
Planning is Not a One Shot Deal
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