Update Your Estate Plan Annually

As your life changes, so should your estate plan. At Brady Cobin Law Group, PLLC, we advise family planning clients to revisit their estate plan every year to ensure that life has not passed it by.

Whether you have experienced a significant life event such as the birth of a baby, change of marital status or the sale of a piece of real estate, you want to make sure that your estate plans are current and will still provide that your assets and property are distributed according to your wishes after you die.

Whether the Brady Cobin Law Group developed your estate plan initially or you need to have your plans updated, give us a call today to schedule a review if it has been a year or more since you have met with an estate planning attorney.

Lack of Estate Planning Update Costs Decedent’s Children

A decision from the Delaware Supreme Court serves as an excellent example of why revisiting your estate plan annually is a prudent idea. In the August 2017 decision, “In the Matter of the Estate of Edward J. Burke,” the court ruled that the decedent failed to take the steps necessary to accommodate the disposition of proceeds from a Virginia land sale that his children argued reflected his wishes.

Burke sold property that was originally to be part of his children’s inheritance and deposited $150,000 in proceeds in a new bank account under his name. When he became ill, Burke’s wife added her name to the account under his Durable Power of Attorney. After he died, the funds were hers, despite Burke’s children’s argument that the money was meant for them.

If Burke wanted this money to go to his four children, who were from a previous marriage, the court ruled that he should have modified his will after the property sale to reflect the proper disposition of that bank account’s holdings. He also should have revised the Durable Power of Attorney to prevent his wife from adding her name to the bank account.

If he had consulted with his estate planning lawyer, the attorney would probably have asked Burke whether he had made any large financial transactions since their previous meeting. We know we would have!

5 Reasons Why It Is Important To Update Your Estate Plan Annually

The Delaware case mentioned above illustrates why you should always update your estate plan after a major financial transaction. Burke failed to change two legal documents and his children suffered a significant financial loss.

Depending on what changes in your life occur over the course of a year, you could need to make several updates.

You may need to update documents such as:

• Last will and testament
• Living will
• Revocable living trust
• Power of attorney
• Life insurance beneficiaries
• Retirement plans’ beneficiaries
• Business plans.

During a yearly visit, we can go down a checklist to prompt your memory about significant events that may require updates to your estate plan. If you reside in North Carolina, here are five specific reasons to speak with an estate planning attorney at Brady Cobin Law Group about updating your estate plan:

• Marital Status Changes. What do we need to tell you? It’s important to revisit your beneficiaries on financial accounts and life insurance policies. A new spouse should be part of plans for the disposition of your estate. But there may be specific assets that you do want to go to a former spouse or your children from a previous marriage. If you divorced some time ago (and duly updated your estate plan) and are now cohabiting with a new love, unmarried couples need estate planning, too.
• Family Size Changes. As your family grows, estate planning documents should be amended so children, grandchildren and/or other new family members are specifically named and included. Deaths should be accounted for, as well. If a grown child divorces, it’s time to check whether a former in-law is named in documents and should be removed. You may have children or grandchildren with special needs whose requirements change over time, or who have problems that have left them estranged from the family and no longer a part of your plans.
• Executors and Trustees Need Changing. We counsel clients to put trusted, sound-minded adult family members or close friends in charge of implementing their estate plans. But executors and trustees age and can grow ill and die. They can move away and out of our lives or otherwise change in our eyes. Make sure you still have the right persons in charge of carrying out your wishes when you are gone.
• Laws Change. Changes to tax law, including deferred taxation of retirement plans, can have a significant impact on the value of your estate and its eventual distribution. The Tax Cuts and Jobs Act of 2017, for example, doubled the estate tax exemption. If you had certain assets earmarked for charity to avoid the estate tax, changes may be due. Tax law could change significantly over the years, especially if or as control of federal government changes parties.
• Giving Priorities Change. If you have had a significant change in the value of your estate, for better or worse, how you want it divided could change. Perhaps you’ve finally arrived at the point that you can give significantly to your school or a charitable group. Conversely, if you’ve had a setback, perhaps you cannot be as generous as you’d like to be and still do what is right for your family. This is particularly an issue in wills that, for example, leave designated amounts to charity and divide the rest of the estate among surviving family members. The designated gift wouldn’t change with your declining fortunes, but what’s left to divide would.

Meet With Our Raleigh Estate Planning Lawyers Now

You are ahead of the game if you have developed plans for disposition of your estate after you are gone. But the circumstances of your life change year-to-year, and your plans can fall by the wayside if they are not regularly updated.

If it has been more than a year since you have reviewed your estate planning documents with a Raleigh estate planning lawyer, contact Brady Cobin Law Group today.

You can also learn more about Common Estate Planning Assumptions You Should Not Be Making in one of our articles.