We all know of David Letterman’s Top 10 List. While this will not be as amusing as David Letterman’s list, below are practical reasons you should dust off your estate planning documents and review your estate plan in light of your present day circumstances. Drum Roll….
#5 – Purchase or Sale of a BusinessIf you have recently purchased a business you should meet with your estate planning attorney to insure that your estate plan is structured properly to deal with the business should you become disabled or at your death. On the other hand, if you’ve recently sold a business, then you will also want to meet with your estate planning attorney to insure that your plan is properly structured now that you don’t own a business.
#4 – The Law ChangesAs we all know, the law changes. Thus, if you hear about changes that you think may affect your estate plan it is time to contact your estate planning attorney to see if an update is recommended.
#3 –Change in Financial Status. Not all of us can win the lottery, but that doesn’t mean that over the course of 4-5 years your financial status won’t improve significantly. A recent inheritance can also quickly change your financial status. In Maine, estates over $2 million are subject to estate tax. If your estate is taxable at the state level (federal estate tax exemption is currently $5.34 million for 2014) then you will want to explore techniques to minimize estate tax. If your estate has declined in value, then you should review your plan to insure that it still makes sense in view of your lower net worth.
#2 – Birth or Adoption of a ChildThe birth or adoption of a child is an exciting time. However, it also is imperative that you update your Will to name a guardian/conservator for your minor child in case something happens to you and the child’s other parent. If you don’t do this, then anyone can step forward and seek guardianship of your child(ren). In addition, you likely will want to set up a testamentary trust for the benefit of your children.
#1 – Change in Marital Status. If you are recently married, congratulations! Depending on the size of your estate, a whole new set of estate tax planning opportunities have become available to you and your new spouse. If you are recently divorced or if your spouse is deceased, then your estate plan should be updated to insure that your former spouse is removed as a beneficiary. You will also need to update the beneficiary designations for any life insurance policies and retirement plans, including IRAs and 401ks to insure that your former spouse is removed there as well.
Even if you find that none of the above is relevant to you, we recommend that you take a few minutes to look over your estate plan every 3-4 years to ensure it still reflects your wishes given your present day circumstances. We welcome the opportunity to assist you with your estate plan, whether creating a new plan or updating an existing plan.