An investment in a complete estate plan is an expensive process. The expense related to an estate plan is not just the cost of putting the plan in place but also the time it took to meet with your lawyer, the time it took to assemble the information needed to put the plan together and the time it took to think through all of the different asset distribution possibilities. Putting the plan in a book and on the shelf puts all of that time and effort at risk. After the plan is finished the question becomes how often should one do an estate plan review.
Don’t put that estate plan at risk by forgetting about it. An annual review of the plan is absolutely necessary to make sure that it will still do its job should something unexpected happen.
Family changes require an estate plan review.
There are a number of factors that should trigger an estate plan review. One of these factors would be a change in the family make up. For example, the birth of a child or grandchild may trigger the need for changes in your estate plan. This is especially important if specific distributions have been made for other children or grandchildren and there is a desire to make similar distributions to the newly born.
A change in the marital status for either you or your children should also be a time to review the plan to make sure that specific provisions remain appropriate.
A death, incapacity or illness should also trigger an estate plan review.
New assets or property require an estate plan review.
Just like the birth of a new child or grandchild should call for the review of a plan, the purchase of some new assets or property should also trigger a review. For example the addition of a new house should be reviewed by an estate planning attorney to ensure that property is properly titled to ensure that it is consistent with the estate plan that was put in place.
Likewise, a significant change in the value of the assets that are held should also activate a plan review. This is particularly important if the plan specifies specific bequests that have some connection to an assets value. For example the bequest of a home to a particular child with offsetting assets to other children may require a review if the value of the home goes up or down.
Changes in the law require an estate plan review.
Similarly, a change in the law should also put in motion an estate plan review. Although attorneys try to anticipate changes in the law, some changes simply cannot be forecast. For example, in the 1990’s the estate plans drafted in that time frame frequently dealt with the issues involving the estate tax. During that period of time the estate tax kicked in at the $600,000 to $650,000 value. The estate tax issue also required complex estate planning that limited the way in which the property was transferred.
Since the year 2000 the estate tax has essentially been eliminated for 90 percent of estate planning clients. As a result, all of the estate plans that were originally designed during the 1990’s should have already been reviewed to make sure that the planning that was put in place at that time is still relevant to the plan.
Simply put, unexpected changes in the law frequently have an impact upon plans that are put in place with the intention of never being touched again. Hopefully estate planning attorneys have been in contact with those plans they put in place under circumstances that have now changed. In any case, the client should undertake a review of those plans at least once a year. If there are any circumstances that have changed the client should consult with an attorney to review the plan and make sure that the documents still protect their goals.
Prepare Your Living Trust or Estate Plan
The specific composition of each family and their changing situations must be considered to make sure that their existing estate plan is still working. The Macomb County Estate Planning attorneys of Penzien & McBride, PLLC have been helping families and business owners to make these types of decisions for nearly two decades.
If you are looking for a compassionate professional that can help you through the estate planning process or if you would like additional information about our Macomb County based estate planning services give us a call at (586) 690-4400 or complete our contact us form.