When did you prepare your estate plan? When was the last time you thought about updating it? If you aren’t sure or if the only answer that comes to mind is, “It’s been a while,” then it might be time to take another look. If you’ve experienced major life events or your family circumstances have changed, these could necessitate updates or modifications as well.
When Is It Time to Revisit Your Estate Plan?
So, is it time to revisit your estate plan? Here are seven circumstances and events that can have potentially-significant estate planning implications:
1. It’s Been a While
If it has been a while since you prepared (or last updated) your estate plan, this alone may be enough to warrant a fresh look. In addition to changes in family and financial circumstances, changes in the law can impact your estate planning strategy as well. For example, the federal Tax Cuts and Jobs Act of 2017 made sweeping changes to the U.S. tax code that impacted many people’s estate plans. And each year, the Internal Revenue Service (IRS) adjusts the federal estate and gift tax exclusion (for 2020, the basic exclusion amount is $11,580,000).
How long is “a while”? There isn’t a specific amount of time that needs to pass before your estate plan can start to get dated, but three to five years is probably a good range. Even if you don’t have to make any changes, you will have the peace of mind of knowing that your estate plan still serves your goals.
2. You’ve Had (or Adopted) a Child
Having or adopting a child is a major life event that should absolutely be reflected in your estate plan. As a parent, you will want to make sure that your children’s financial needs will be taken care of in the event of your death or incapacity, and you will want to establish thorough guardianship provisions as well. If you already have a child (or multiple children), you will want to be sure that your estate plan clearly identifies the assets that you want to leave to each child and you may want to consider establishing a trust (if you haven’t already) to manage your assets in your absence until your children come of age.
3. You’ve Gotten Married (or Divorced)
Getting married has certain automatic effects with regard to property ownership and distribution rights in Florida. If you had an estate plan before you got married, it will be important to make sure your estate plan reflects your current family circumstances and adequately addresses the relevant provisions of Florida law.
If you have recently gotten divorced, getting divorced does not automatically impact your estate plan. As a result, if your estate plan includes provisions for distributing assets to your former spouse or designates him or her as your personal representative or health care surrogate, you will most likely want to update your estate plan promptly.
4. A Family Member Has Passed
If you have lost a family member who you included in your estate plan, then you may need to update your plan to reflect your loss. While it is possible that contingency provisions in your estate plan address the matter of your loved one’s passing, you will want to be sure and you may need to adopt new contingency provisions based on your new family circumstances. This is the case for family members who were named as:
- Personal Representatives, and/or
5. You’re Financial Circumstances Have Changed
Along with changes in family circumstances, changes in financial circumstances can also necessitate updates to your estate plan. For example, if you have recently received a promotion, accepted a higher-paying position, or started a business, you may want to revisit your estate plan to make sure it is still adequate to meet your planning needs. By the same token, if you have taken on new debts, filed for a personal bankruptcy, or otherwise faced financial strain since you prepared (or last updated) your estate plan, these are occurrences that may need to be addressed in your estate plan as well.
6. You’ve Received an Inheritance or Acquired Significant Assets Through Other Means
Similar to earning more income or starting a business, if you have received an inheritance or acquired significant assets through other means, this too is a change that can require estate plan modifications. Whether you want to leave specific assets to specific family members, you need to plan around the estate tax, or it makes sense to think about setting up a trust or foundation, you will want to take the necessary steps to ensure that your newly-acquired assets will be distributed as you intend.
7. You’ve Reconsidered Your Options or Your Goals Have Changed
Finally, if you have reconsidered your options or your estate planning goals have changed, then you should sit down with an attorney to ensure that your plan reflects your final wishes. People change their minds all the time, and it is common to want to make adjustments and modifications. Some examples of common reasons why people choose to modify their estate plans include:
- Changing their preferences regarding health care decision-making in the event of incapacity and for end-of-life care;
- Wanting to leave money to a charity or establish a charitable foundation;
- Wanting to take a different approach to distributing their assets or planning for business succession; and,
- Other changes in family or financial circumstances have altered their estate planning needs or goals.
Speak with a Trusted Local Planning Attorney in Confidence
If you think it might be time to update your estate plan, one of our attorneys will be happy to meet with you and discuss the options you have available. To request an appointment at our law offices in Jacksonville, FL, please call 904-288-4414 or contact us online today.