Estate planning is a strategy. When you draft a will or establish a trust, you are making a calculated decision as to where you want your assets to go after you die. You may have also named a guardian for your children or granted someone the power of medical attorney to help care for you if you are ever incapacitated. While many of these designations may never need to change, there are times when an estate plan must be reviewed.
When to Review Your Estate Plan
Since life’s circumstances can change unexpectedly, it is important to account for them in an estate plan. Here are some of the most common events that should trigger an estate plan review:
Newlyweds may not want to give much thought about estate planning, though they may already be merging accounts or thinking about buying a home together. However, marriage is one of the most important estate planning milestones. If one partner has been married before, they should ensure that their former spouse has been removed from their will and is no longer named in a trust or any beneficiary designations.
People who have been married before may also want to establish a trust to provide for children from their previous marriage.
Birth or Adoption
A comprehensive estate plan should account for any new children—biological and adopted. New or expectant parents should consider who would make a fitting, responsible guardian for their newborn, and they may also want to make use of legal instruments—such as a trust or Lady Bird Deed—to ensure their children will be taken care of after they die.
Death of a Family Member
Thinking about the law in times of grief can be difficult. Nonetheless, death always provides cause to review an estate plan. If an intended beneficiary dies, the estate plan should be reviewed to either provide for new heirs or redistribute assets among those already named.
Changes in Assets
Assets can come in many forms and at unexpected times, and it’s best to address them sooner than later. If someone suddenly receives a large inheritance from a relative, has sold a business, or has bought a house, the estate plan needs to reflect these changes. After all, if a significant or valuable asset is not included in an estate plan, it is not protected by the estate plan, either.
Moving to Another State
Estate planning laws change from one state to the next. While some differences can be minor, others are not. Some states, for instance, require that the spouse or children of the deceased inherit a set percentage of the estate unless otherwise specified in a will. Other states may have inheritance taxes that must be accounted for in an estate plan; however several states, such as Arkansas, place no stay levy on inheritances.
Similarly, legal devices—such as the durable power of attorney—may have different requirements from one state to the next. Consequently, it is important to have an attorney licensed to practice in the new state of residence review the old estate plan to sort out and amend any discrepancies that could complicate inheritance transfers.
While changing beneficiaries can sometimes be as simple as striking one name or adding another, people with complex or comprehensive estate plans will need to conduct a review. In Texas, some legal instruments may take precedence over others such as the beneficiary designation on a bank account or life insurance policy, for example. These override any provision in a will.
Furthermore, choosing to disinherit a child or other close relative may have wide-ranging, long-lasting repercussions. Attorneys typically advise that anyone seeking to change or omit beneficiaries from a will or trust seek legal help to minimize the chance their estate will be contested in probate.
Every estate subject to probate should have a named executor, whether it be an experienced Texas estate planning attorney or a trusted confidante. In the event a friend, family member, or spouse no longer wants to act as an estate executor, it is essential the plan be altered. Failing to replace an executor can present special challenges during probate and possibly compromise the integrity of proceedings.
Contact Us Today
Even if your life has remained more or less the same since the last time you went over or amended your estate plan, it is still a good idea to review your arrangements every three to five years. Smith Klein Law can help you create an estate plan or update an existing one. Send us a message online, call us, or visit any of our Dallas, Collin, or Denton county locations to schedule your free initial consultation.