When surveys are conducted, they consistently find that the majority of Americans do not have any estate planning documents in place. Surprisingly, many baby boomers and some elders are unprepared, and precious few younger adults have taken any of the appropriate steps.
Clearly, most people know that they should have estate plans in place, but they put it off for one reason or another. Since there is so much procrastination, if you have been dragging your feet, you may become quite complacent when you finally take action.
You may breathe a sigh of relief, put the documents away for safekeeping, and leave it at that. Those that take this approach are not alone, but in reality, estate planning should be viewed as a long-term process. Over the years, events will take place that will invariably trigger the need for estate plan updates.
Changes in Marital Status
A significant percentage of marriages do not withstand the test of time, and if you are like most people, a change in marital status will render your existing estate plan obsolete. You will want to review your beneficiary designations and make the appropriate adjustments.
If you have a well-constructed estate plan, it will include an incapacity component. Durable powers of attorney are used to name agents that would act on your behalf in the event of your incapacity. You may want to change your representatives as well.
Folks that get divorced often get remarried at some point in time, and once again, you will have to take a long look at your estate plan and make some changes that reflect your new marital status. There are strategies that can be implemented to protect the interests of your children from a previous marriage if this is a source of concern.
Family Dynamic and Relationship Status
When there are additions to your family, you may want to make some adjustments, and the same can definitely be said about subtractions. With regard to people passing away or otherwise leaving the family, in addition to inheritances, a loss could impact your existing choice of executor, trustee, or power of attorney agents.
It is not the most pleasant thing in the world to discuss, but unfortunately, there are sometimes major fall outs between close family members. If you come to the conclusion that you want to change the amount that someone on your inheritance list will receive, or disinherit them altogether, it can be done under most circumstances.
Estate Tax Exposure
Your existing estate plan will be based on the life situation at the time it was executed, and this includes your financial profile. There have been some significant changes to the federal estate tax parameters over the last couple of years. The exclusion amount has gone from between $5 million and $6 million up to $11.4 million in 2019.
If the value of your estate exceeded the exclusion that was in place when you devised the plan, you may now be under the threshold. On the other side of the equation, someone that was not faced with estate tax exposure when a plan was created could subsequently experience big-time financial success and the estate tax responsibilities that go along with it.
We Are Here to Help!
These are a handful of the scenarios that could call for an estate planning review, but there are others. Our doors are wide open if you know that your estate plan needs an update, or if you would simply would like to review it with the benefit of legal assistance.
We can be reached by phone at 704-944-3245 in North Carolina (Charlotte or Huntersville), and if you would like to get in touch with our Kentucky office, the number is 606-324-5516 (Ashland, KY) or (859) 372-6655 (Florence, KY). There is also a contact form on this website that you can use to send us a message.
Pamela Potter
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