Life can take twists and turns, and as time goes by and life changes occur, it is important to keep your estate plan up to date.

But when exactly is the right time to update your estate plan? If you answer “no” to any of the following questions, then it may be time to consult with a trusts and estates attorney to update your estate plan:

• Does the estate plan align with current goals and priorities?
• Does the estate plan account for major or recent life changes?
• Does the estate plan contain the five core estate planning documents?
• Does the estate plan include up-to-date beneficiary designations?
• Does the estate plan minimize potential taxes and expenses for heirs?
• Does the estate plan contain special needs planning?
• Does the estate plan avoid probate?

Current Goals and Priorities

Maybe the goal of holding on to that beach house has changed to a simpler life with a condo with a community pool. Or that snazzy convertible that you were going to bequeath to your daughter was parlayed into a more sensible sedan. Over time and as current goals and priorities change, the estate plan will need to have certain provisions updated to reflect your particular place in life.

Major Life Changes

As major life changes occur due to births, illnesses, deaths, real estate sales or purchases and more, invariably over time, the estate plan will need to be updated. These updates may include modifying, deleting or adding provisions to ensure the plan reflects your current wishes in the most efficient manner possible.
5 Core Estate Planning Documents

There are five core trust and estate planning documents that should be included in every estate plan:

1. a will,
2. a trust,
3. a durable power of attorney,
4. a health care proxy, and
5. the Health Insurance Portability and Accountability Act of 1996 (HIPAA) form.

If any of the above documents are not included in the estate plan, it’s time, with the assistance of an experienced trusts and estates attorney, to add them.

Up-to Date Beneficiaries

Updating beneficiaries in an estate plan is essential to ensure that it aligns with current intentions and life circumstances. It is critical that listed beneficiaries are updated as necessary, whether due to births, deaths, marriages, adoptions or other situations. Regularly reviewing and revising beneficiary designations helps prevent unintended outcomes and ensures that the estate plan fulfills your goals.

Taxes and Expenses for Heirs

Tax returns that may be required to be filed include the decedent’s final federal and state personal income tax returns, federal and state fiduciary income tax returns reporting income earned after death and federal and state estate tax returns if the value of the estate is large enough to require estate tax returns to be filed. It is the executor’s responsibility to account to the beneficiaries the value of the assets.

Additionally, planning for the inheritance of retirement assets as affected by the SECURE Act is critical as it will significantly impact a beneficiary’s tax obligations. The estate plan should also address any special circumstances such as a beneficiary with significant debt and to safeguard the inheritance from possible creditors.

Special Needs Planning

A person with a disability can have money set aside for them through a special needs trust, often referred to as a supplemental needs trust, without it affecting their capacity to receive government assistance. Similar to other types of trusts, the person who establishes the trust (known as the trustor or grantor) names a trustee who manages money distributions for the beneficiary’s benefit (the person with a disability). The funds in the trust do not qualify as resources for SSI and Medicaid since they are not kept in the beneficiary’s name.

Avoiding Probate

It is critical to distinguish between probate and non-probate assets during the estate administration procedure. Certain assets, such as accounts with a designated recipient, may proceed directly to that beneficiary without going through the probate process.

Avoiding probate should be a key estate planning goal, with the estate structured with the goal that the majority of it passes to your beneficiaries without probate. Generally, when assets pass to the next owner either via contract or operation of law, they are exempt from probate.

Life can change quickly. An up-to-date estate plan can provide peace of mind for you and your family when you need it most.

At Tully Rinckey PLLC, our lawyers can help you draft your estate planning documents, or make modifications to the ones you already have. Our attorneys have years of experience in estate planning, and are ready to provide competent, compassionate, and affordable service. Contact us at 8885294543 for a consultation today!

As Senior Counsel at Tully Rinckey, Marlee Stever, Esq. provides legal counsel in the areas of estate planning, trust administration, probate administration, guardianships, conservatorships, and estate tax matters. With a robust background in crafting comprehensive estate plans, Marlee focuses on developing strategies that protect clients’ assets and ensure financial stability for future generations.