An estate plan is a set of documents, such as a will, trust and powers of attorney, that dictate how assets will be managed and distributed upon death or incapacity. An individual’s current legal and financial situation should be considered to create a comprehensive estate plan tailored specifically to their needs.
Ensure Your Wishes Are Respected
The primary reason to update an estate plan is to ensure that an individual’s wishes are respected upon death. For example, suppose an individual has recently acquired valuable property or has had changes in family structure (such as marriage, birth of a child, divorce, or the death of a relative). In that case, updating the documents that outline how assets should be distributed is important. If the documents are not updated, this could lead to disputes between family members and legal complications when probate occurs. Additionally, if laws change at the state or federal level, those changes need to be incorporated into the existing estate plan to remain valid and effective.
Ensure Your Loved Ones Are Protected From Tax Implications
Another reason for updating an estate plan is for future tax planning purposes. Without proper planning and asset allocation, taxes can significantly reduce the amount that beneficiaries receive after one’s death. Additionally, some states have transfer taxes on certain assets (such as real estate), which must be factored into one’s estate planning decisions. In addition, changes in Federal tax law may affect whether other taxes, such as capital gains, gift, or estate tax, will apply at the time of death or while transferring assets during life – thus providing additional incentive for individuals to review their plans regularly with their advisors and make necessary updates when necessary.
Ensure Your Medical Decisions Are Handled With Care
Estate planning also encompasses contingency plans in case of incapacity due to illness or injury – commonly referred to as disability planning. This means creating end-of-life documents such as Advance Health Care Directives which list specific instructions about medical treatments that should be administered if certain conditions arise – such as if a person suffers from dementia or a traumatic brain injury and can no longer make decisions on their behalf. This planning can provide peace of mind for individuals, as their wishes will be legally documented and respected even if at some point of their lives they cannot make decisions themselves due to illness or injury.
Ensure You Leave a Legacy For Your Loved Ones
Finally, updating an estate plan allows people to express gratitude for those who have helped them over the years – whether it be through providing advice on financial matters or being there simply by offering emotional support during difficult times – by including them in a legacy interview with our firm. Specific instructions can also be included in your plan regarding how charitable donations should be handled after death – enabling individuals who wish to donate part of their wealth to leave behind a lasting legacy that furthers causes they believe in long after they pass away.
Keep Your Estate Plan Up-To-Date
In conclusion, having an up-to-date estate plan helps to ensure that your wishes are respected upon incapacity or death; protect you and your family from unnecessary taxes; help with disability planning; and allow you the chance to express appreciation towards those who have had a positive impact on your life while still alive. Therefore, estate plans should consider current circumstances and anticipate future events to avoid any potential problems. As your Personal Family Wealth & Legacy Lawyer, we hold regular reviews of your estate plan through the stages of change in your life, or minimally, every three years at no additional charge if you create a plan with our office. Contact us today with your questions about your current plan and if you need an update.