(415) 398-7275

Five Times You Need to Update Your Estate Plan

So, you’ve worked hard to set up your estate plan (trust, will, powers of attorney), and you think you can set it and forget it, right?

Not so fast! There are five life changes when you’ll want to make sure you review your documents and make necessary changes.

  1. You have a new child!

Maybe it’s your first or it’s your third. Your estate planning documents are filled with references to those little ones.  If it’s your first child and you haven’t picked a guardian, now is the time to do so. Your documents might not even currently provide for your newest addition, make sure to check with an attorney to have them included. If your current children are already included in your estate plan, make sure your newborn is also included. Most documents provide for your children (and future children) by including a reference to “descendants”. Some documents don’t! Make sure your children are provided for by updating your estate plan to include the new child’s name and birth date.

  1. You bought a new home!

You took ownership to that new home as trustee of your trust, right? Buying a house is stressful enough, most clients forget that they need to take ownership to the property as ‘trustee’ of their trust. We often see clients forget this critical piece . When you buy a home, stop and think, “I need to update my trust!” Make sure you not only take title to the property as trustee of your trust, but you are listing the new property on your Schedule of Trust Assets. Make sure your trust does its original job — avoiding probate — by contacting an attorney to double check the house is in your trust!

  1. You moved to a new state!

Believe it or not, each state has its own laws and probate code. If you move to California from New York (or anywhere else!), you need to make updates to your estate plan. Most of your documents are state specific, so a new attorney licensed within that state will likely need to restate your trust to incorporate that state’s new laws.  This sounds complicated, but it’s commonly done as the Bay Area is the home of many out of staters.

  1. Your relationships have changed!

The trustees, executors and agents you’ve chosen in your plan are crucial for your wishes to be followed. Make sure the ones you’ve listed are still the best suited for the job. Some clients will name their parents in these roles. However, as parents age, their ability to deal with detailed financial information is greatly reduced; as such they may no longer be the best fit for your estate plan. You may have named a friend, but you aren’t close with them or they’ve moved out of the country. Take a look at those people you’ve nominated to make sure they are the ones you trust to handle your finances and health care decisions when you no longer can.

  1. Tax changes!

Do you closely follow each change in tax laws? I didn’t think so. Tax laws can change on a state level, but also at the federal level. Estate planning attorneys follow these changes. Tax changes can be on a property tax level, estate tax level or income tax level. It’s important to revisit your plan every few years to make sure that your plan efficiently transfers the bulk of your assets to your beneficiaries as soon as possible with the least amount of taxes and fees.