Every time I present an educational workshop or meet a prospective new client, I am always surprised to their response when I tell them I am a Trust and Estate Attorney. People that I meet will routinely tell me … “we had that taken care of years ago.”
Contrary to what you may think, estate planning is not a one and done deal. Your estate plan may not ultimately work out as planned if you do not update that plan regularly. Here are seven reasons why you need to review your estate plan:
- Family Circumstances Changes
Anytime your family circumstances change, you need to update your estate plan. If you get married, if you get divorced, if you experience the birth of a new child, if you adopt a new child, or if someone in your estate plan (yourself, executor/trustee, or beneficiary) dies, you need to update your estate plan. Also, if you have an adult child who gets a divorce, you may need to update your estate plan to protect that child’s inheritance from future divorce claims or creditor claims. All of these circumstances require mandatory changes to your estate plan.
If you retire, sell your business, or change careers, it is time to update your estate plan. If you retire, it may be time to withdraw from your IRA. If you sell a business, you could experience an influx of cash that may require an update your estate plan.
- Stock Market Fluctuations
If the stock market fluctuates and creates a change in your wealth, you may need to update your estate plan. A significant loss, may require you to change your strategy of charitable giving, for example. A significant loss may also require an asset protection or inheritance protection strategy. However, a significant gain may require tax planning and gifting strategies to reduce potential taxes and maximize your estate and legacy planning.
- Health Changes
If your health changes, it is time to update your estate plan. I can’t tell you how many times I receive a phone call where our client is on the eve of entering a long-term nursing home facility following an illness. If you suffer a health change and anticipate needing long-term care, you may need to update your estate plan to name someone else as trustee, as well as providing detailed instructions of the type of long-term care that you would want. Also, when there is a major health change, it may be appropriate to investigate establishing an iPUG Trust (Irrevocable Pure Grantor Trust) and/or Qualified Income Trust.
- Law Changes
Anytime the law changes, you need to review your estate plan. If the tax law changes, you will need to review your estate plan as well. The best rule of thumb is to review your estate plan once a year to determine if any of the estate and tax law changes this year adversely affect your estate plan.
- Receiving an Inheritance
If you recently received an inheritance, it is time to review your estate plan. The inheritance could result in tax planning in regards to your estate planning, it could prompt a need to provide to charity, but most importantly, it could result in having a higher liability risk, and therefore, require you to engage in some asset protection planning.
- Bought a New Home or Won the Lottery
If you bought a new home, especially if you bought new property out-of-state, you need to update your estate plan. If you now own property in two different states and did not set up a living trust-based estate plan, it may now be time to consider making that change. Anytime you own property in two different states, that will require a probate administration, and likely two different lawyers your family will need to hire to settle your final affairs. In addition, if you won the Tennessee Lottery recently, you may want to consider establishing an irrevocable trust for both asset protection reasons, as well as to accept the lottery winnings anonymously.
If you need to review an existing estate plan or if you need to create one for yourself and your family, please call your Tennessee Estate Planning Attorneys at Fidelis Law today and schedule a time for us to sit down and discuss the perfect estate plan that will protect your family and preserve your legacy.