4 times you should update your estate plan
Certain events in life should merit a review of someone’s estate plan, such as a marriage, death or move.
According to the American Bar Association, roughly 55 percent of people in America will pass away without having put an estate plan in place. Therefore, people in Pennsylvania who have a will or a trust established are already ahead of the game.
It should be noted, however, that simply having a plan is not enough. Wishes for asset relocation, business succession and end-of-life decisions should be reviewed on a somewhat regular basis. Experts recommend that people assess their plans every few years to ensure everything is accurate. Additionally, you should revisit your estate plan when the following occurs:
1. Birth, adoption or death
An estate plan likely is not top of mind when someone new comes into the family or someone passes away. It is still important to make changes to the plan when these events happen, should the owner of a will or trust wish to include the new people or re-evaluate property distribution after a death.
2. Marriage or divorce
Similar to births, adoptions and deaths, marriages and divorces mean someone is coming into a family or someone is leaving. This is true when it the event concerns the owner of an estate plan, or when it happens to someone mentioned in the estate plan. Many people list their spouse as the chief beneficiary and power of attorney. A divorce should certainly prompt a change in these areas.
3. Changing laws
State laws may have a serious impact on an estate plan. Consider, for example, a change to estate taxes, which would drastically affect the way someone may handle his or her affairs.
Additionally, certain estate planning laws vary from state to state. Moving into a new state would necessitate a review of someone’s plan to ensure that it abides by the law and maximizes the situation, relating to taxes.
4. A change in assets
A significant change in assets would merit a review of an estate plan. For example, selling off certain property or collections may mean that a plan would need to be revised. Acquiring certain assets would also require someone to amend the plan to determine how those assets would be handled in the event of a death.
Lastly, experts recommend that people who have a 401(k), IRA or other retirement plan that requires distributions to begin at 70½ years to review an estate plan before reaching that age.
With how fast-paced life is, it is easy to see how some of these items could fall through the cracks. That is why it is important to work with a trusted professional to ensure someone’s wishes will be met. Anyone who has concerns about this topic should speak with an estate planning attorney in Pennsylvania.