Reviewing Estate Plans

Reviewing existing estate plans is an important part of the estate planning process. While estate plans are valid at the time they are signed, periodically updating and reviewing the documents is important, especially after important life events like deaths, births, marriages, and divorces. Five areas individuals should focus on when updating and reviewing estate plans are below:

1. Just a simple review of the necessary documents can help indicate whether the documents align with the individual’s current situation. Important documents to periodically review are the will, power of attorney, living will, and any trusts.
2. It is important to ensure that those appointed as guardians, executors, trustees, and agents under a power of attorney are in good standing—if they’re not, other individuals will need to fill those roles.
3. For individuals who created trusts for their minor children who are now adults with children of their own, it may be time to change the earlier trusts to account for the grandchildren.
4. Additional assets acquired after a trust’s formation may not automatically become part of the trust (i.e., a second home will not become part of a trust automatically). Instead, the settlor must transfer the asset to the trust during his or her lifetime.
5. Some individuals will need to change estate planning documents after changes in estate tax law occur. Additionally, the current favorable exemption may prompt many individuals to make gifts now, in case the exemption decreases for 2013.

See Michael S. Fischer, 5 Important Steps to Update Estate Plans, Advisor One,  Apr. 2, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.