Estate Planning: Not a one-and-done endeavor

Circumstances in life change over time. People get married, have or adopt children, buy houses, and sell houses. They make new friends, get new family members, and fall out of favor with people. Just as life changes, the estate plan is a lifetime endeavor that needs updating to reflect these changes.

From the beginning…

When we first leave the house, an estate plan may seem unnecessary. Most often, we do not have many assets of which to speak. Recent studies show this is why 30.4 percent of people lacking an estate plan have not made one. (As you may recall, only 32 percent of the U.S. population have an estate plan in the first place.) But this attitude fails to account for the full story. When on our own for the first time, it is important to put in place a number of estate plan vehicles in place. This includes, for example a Health Care Directive and Financial Power of Attorney. Remember, for the first time, if something goes wrong, parents no longer have access to health and financial records. If we want our parents to help us in our time of need, we must plan.

…to the middle…

Throughout life, we will accumulate assets – houses, cars, cabins, art, etc. Personal effects with great sentimental value will be gained, and the estate plan needs to reflect these changes. Remember, one of the greatest areas of contention tends not to be money or property. Rather, fights happen over personal property with sentimental value. As things change – people and assets enter and exit your life – the estate plan needs to be updated.

…to the end

As we advance in age, our needs change once again. We have more assets and we may get a divorce or remarry. Charitable giving may become a priority. We may have grandchildren for whom we would like to leave a legacy. Or, we may find ourselves in need of long-term care.  Assets may need to shift into trusts in order to take advantage of various federal or state benefits. Again, the estate plan is the vehicle to address these changes.

To top is all off, sometimes the law changes. It doesn't happen often, but when tax law or estate law changes, estate plans need to be updated to comply and take advantage of the new regulations.

Takeaway 

While estate plans may not need to be updated very often, they are a lifetime endeavor. An estate plan should be drafted early, and then be looked at every few years to see if there needs to be any sort of update. If you need assistance reviewing your estate plan to make sure it meets your current needs and complies with the law, contact Signature Law for a free consultation.