If you have not looked at your estate plan for several years, it may be time to do so. An out-of-date estate plan could lead to several problems, both while you are alive and after you die.
You need to ensure your estate plan reflects your life and assets today. Let’s say you made your first estate plan when in your early 20s. Since then, you have got married, had kids and divorced. You bought a home, sold a house and bought another one. Perhaps you started a business, made a load of money and invested it. Or maybe you invested all you had into a company that failed. Then last year, your parents passed away and left you an inheritance. All those events may have required a rethink of your estate planning for two main reasons:
- Gaining or losing wealth: This affects tax, entitlement to Medicaid and what you have to leave when you die.
- Gaining or losing family members: This can affect your wealth and who you wish to leave things to when you die. It may also change who you want to give power of attorney to or who you want to act as executor of your estate.
Changes in tax laws can render a fantastic estate plan ineffective
Governments make frequent changes to tax laws that affect estate planning. These changes may require you to move your assets around if previous havens no longer work: Or they may provide new tax break opportunities you can take advantage of.
An estate plan is not something you can make once and ignore for years. At least not if you want it to serve you well. The world changes constantly, and your plan needs to evolve with it.