Estate Plan Updates. Is Your Estate Plan Up-To-Date?

Jul 3, 2023 lifefocusplanning-admin

By Matthew A. Ferri, Esq. Creating an estate plan is a crucial step in ensuring your assets are protected and your wishes are honored after you are gone. However, simply drafting an estate plan is not a one-and-done task. Life is dynamic, and circumstances change over time, making it essential for regular estate plan updates to reflect these changes.

Law and Life Is Not Static

Life is full of changes, both expected and unexpected. Major life events such as marriage, divorce, birth of children or grandchildren, and the death of a loved one can significantly impact your estate plan. A significant medical diagnosis for you, or your trustees or beneficiaries can also impact your estate plan. The law on which your plan is based is also not static. Changes in Washington D.C. can have significant impacts on your estate plan. Estate plan updates allow you to account for these changes and ensure your assets are distributed as you wish.

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Estate Plan Updates – Finances

Your financial circumstances can fluctuate over time. Your beneficiaries may also have significant changes to their financial situation or future financial needs. You may acquire new assets, sell existing ones, or experience changes in your income or investments. A beneficiary’s divorce or health condition may change what you want to leave that beneficiary. Regular estate plan updates allow you to evaluate if your current plan adequately addresses your financial situation and goals. By updating beneficiary designations and asset distribution strategies, you can ensure your plan aligns with your financial objectives.

Estate Plan Updates – Taxes

Tax laws are subject to change, and these changes can have a direct impact on your estate plan. By staying informed about updates to estate tax laws and regulations, you can make necessary adjustments to minimize tax liabilities and maximize the value of your estate for your beneficiaries. Consulting with an estate planning attorney can help you navigate these complex legal matters and optimize your plan accordingly.

Estate Plan Updates – Minor Children

If you have minor children, your estate plan likely includes provisions for their care and guardianship. However, your initial choice of guardians may no longer be suitable due to changes in the circumstances of potential guardians or your own preferences. Regularly assessing your estate plan allows you to update your choice of guardians and make any necessary revisions to ensure your children are well cared for in the event of your death.

Estate Plan Updates – Special Needs Beneficiaries

If you have a family member with special needs, it is crucial to review your estate plan regularly. Changes in their circumstances or the availability of government programs can impact their financial and healthcare needs. By updating your plan, you can ensure that the proper provisions are in place to protect and support your loved one with special needs, including establishing a special needs trust if necessary. The rules regarding special needs children are always changing and they vary from state to state. If you move to a new state, it is important to ensure both your estate plan, and any special needs trust works in the state in which you live.

Estate Plan Updates – Powers of Attorney

When updating your estate plan, it is important to consider more than who gets your stuff when you are gone. Your estate plan will consider financial and healthcare powers of attorney to help manage your assets and healthcare if you are not able to yourself. Estate plan updates, and keeping your records updated is critical if you become disabled. The burden on your Financial Agent and your Healthcare Agent can increase significantly if your estate plan and records are not updated.

Outdated Estate Plans

Outdated estate plans can lead to confusion and disputes among family members and beneficiaries. By regularly reviewing your plan, you provide clarity and minimize the risk of legal challenges. Failing to reflect current circumstances resulting from divorce, deaths, births, or sales of assets can result in your planning failing to work, or failing a legal challenge. Ensuring that your plan accurately reflects your intentions reduces the likelihood of family disagreements and helps preserve family harmony during what can already be a challenging time.

Regular Estate Plan Maintenance Is Essential

Regularly updating your estate plan is essential to protect your assets, honor your wishes, and adapt to life’s changes. By staying proactive and reviewing your plan periodically, you can ensure that it remains current. You can keep it relevant and aligned with your evolving circumstances and goals and bring peace of mind to you and your loved ones.

Matthew A. Ferri

About the Author

Matthew A. FerriJ.D., M.B.A., is the Founder and Principal of Life Focus Planning, a Michigan based estate planning law firm. He is an estate planning attorney with offices in Bloomfield Hills, Michigan and Shelby Township, Michigan. His expertise includes advanced estate planning, elder law, Medicaid planning, Veterans benefits, special needs planning, and business planning. During law school, Matt focused his studies on business law while simultaneously earning his MBA. After graduation, Matt started his own firm with the goal of helping individuals and their families develop estate plans that work. He received the rating of AV Preeminent® by Martindale-Hubbell: The highest peer rating standard. This rating signifies that a large number of his peers rank him at the highest level of professional excellence for his legal knowledge.

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