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Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate
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4 triggers that should prompt a review of your estate plan

These four things could lead to unforeseen changes in your estate plan.

An estate plan is an important part of financial planning. This plan is more than just a guide for handling of assets upon one’s death. A well-drafted estate plan will provide information to guide the handling of finances and health care matters when the creator is incapacitated. It can also help guide future financial decisions to help better ensure you make the most of your estate while you are still around to enjoy it.

There are certain life triggers that should prompt a review and update to an established estate plan. Four common examples include:

  • Addition of family members. The growth of a family, through birth of a child or grandchild, adoption or marriage, should trigger a review of an estate plan. This new addition may require updates in the list of heirs within the plan.
  • Loss of family members. The loss of family members, through death or divorce, should also trigger a review. It is important to remove any unintended beneficiaries to mitigate the risk of an unwanted individual benefiting from the estate. This removal is generally not automatic. The creator may need to take specific steps to better ensure the person or their direct heirs are no longer beneficiaries to the estate.
  • Passage of time. It is a good rule of thumb to review an estate plan every three to five years. This provides an opportunity to reevaluate your goals and make adjustments as needed.
  • Changes to tax law. Although not common, major changes to tax law warrant a review. The Tax Cuts and Jobs Act (TCJA) is one example. This major piece of tax reform greatly changed the tax code. This very likely impacted existing estate plans. An attorney experienced in estate and tax planning can review the impact and discuss changes to help better ensure your plan makes the most of tax advantages that resulted from the TCJA.

A review of an estate plan generally requires more than just reading over one’s will. A well-balanced estate plan will include durable power of attorney and advanced health care directive documents as well as trusts if appropriate.

The review should also entail a discussion about beneficiary designations. Certain accounts, like many retirement plans, include beneficiary designations. The creator generally choses these designations when setting up the account. They involve a list of one or two individuals that will receive the account should anything happen to the owner. These may not be governed by the will or trust and may require separate changes to ensure they are handled according to your wishes.

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