Has Your Estate Plan Been Reviewed?

A lot of people procrastinate before they put an estate plan in place, and once they finally take action, they breathe a sigh of relief. The documents are tucked away somewhere for safekeeping, and they feel as though the responsibility has been fulfilled.

It’s certainly a good feeling to have an estate plan completed and in place. However, estate planning should be looked at as an ongoing process. There are various life situations that can call for an estate plan review, we will provide an overview here.

Evolving Family Dynamic

When you get married and/or have children, you are going to have people relying on you. At that point, an estate plan is an absolute must. You have to make sure that you have enough life insurance to serve as an income replacement vehicle to provide for your family if the unthinkable takes place. And if you’re a parent, you should designate a guardian for the children.

After you take that initial step, it is important to recognize the fact that estate plan revisions will become necessary along the way. There may be changes within the family, and you have to make the appropriate adjustments to keep your plan up-to-date at all times.

Marital Status Changes

Unfortunately, many marriages end in divorce, and this is a major life event that will trigger the need for an estate plan update. Most people will want to change beneficiary designations and adjust their incapacity planning documents.

If you get remarried as a parent later in your life, you have to take the right steps to protect the inheritances that you would like to leave to your loved ones. This can be done through the use of a qualified terminable interest property trust, and we will look at that device in a different post.

Financial Status

You may do well financially over the years, and this could have estate planning implications. Most people are not going to be exposed to the federal estate tax because it currently only applies on transfers that exceed $11.58 million. However, if you are one of the fortunate few, you have to implement a strategy to mitigate your exposure.

Two of our offices are in Kentucky, and there is also a state-level inheritance tax in that state. This tax can impact people who are not multimillionaires, should you gauge your estate’s exposure.

Ever-Changing Laws

As the years pass, laws that impact asset transfers invariably change. For example, that $11.58 million figure that we cited above is the exclusion in 2020. It came about as a result of the tax relief act that was enacted at the end of 2017. The exclusion was previously $5 million adjusted for inflation.

If Congress does not extend the current law, the exclusion will return to previous levels. Plus, at the present time, an inheritor is not responsible for capital gains taxes on inherited appreciated assets. This could change as well.

These are just a couple of examples, and their other potential relevant legislative actions that do not directly apply to taxation.

Access Our Free Worksheet!

We have prepared a very effective worksheet they you can go through to gain a more thorough understanding of the process. To receive your copy, visit our worksheet page and follow simple instructions.

Need Help Now?

If you are ready to put an estate plan in place, our doors are open. You can schedule a consultation at our Charlotte, North Carolina or Huntersville, North Carolina office if you call us at 704-944-3245.  The number in Ashland, Kentucky is 606-324-5516; and the number in Florence, Kentucky is 859-372-6655.

We also have a contact form that you can fill out if you would like to send us a message. If you reach out in this manner, you can expect to receive a prompt response.