Estate plans are only useful when they accurately reflect the current state and federal tax law, as well as your client’s circumstances. An outdated estate plan can result in unintended issues including, but not limited to unintended income and/or estate tax consequences; increased fees and costs associated with settling an estate; leaving less for your clients’ spouse and heirs; disqualifying a special needs beneficiary from receiving benefits; or disinheriting desired beneficiaries or including unintended beneficiaries.
An Occurrence of a Triggering Life Event
Triggering life events range from birth or adoption of a new child, change in marital status, to the death of a family member. Any of these situations warrant revisiting your estate plan to address any changes in beneficiary designations, successor trustee or executor, and health care or fiduciary agents. If you currently have a trust, it must be changed, and updates can be made by either an amendment. But, if numerous revisions are required, then a trust restatement would be the better option to prevent future controversies.
If you have recently become a parent or grandparent, you may consider amending your trust or estate plan to add specific bequests, add an education trust, or set up and fund a gifting trust.
Changes to a job and/or living circumstances
If you have recently moved to Pennsylvania from another state, you may need to update your trust or other estate planning documents to comply with the laws of Pennsylvania. Additionally, you may need to retitle your new residence in the name of your trust or other estate planning documents.
If you have recently purchased a second home, you may need to amend your trust or other estate planning documents to address what happens to the second home after your death. You may need to retitle your new residence in the name of your trust.
If you are a business owner and there has been a change in ownership, you should consider updating your estate plan. For example, if you recently sold your business, you may need to update your trust or add additional advance estate planning to address the extra liquidity.
If it’s been a while since you updated your estate plan
The state and federal tax laws have significantly changed over the past year; if your estate plan is outdated, it may cause income or estate tax issues because it does not take advantage of the modern, flexible planning options. If a long time has passed since you previously drafted estate planning documents, significant family changes may have occurred. For example, your old trust may not disinherit desired beneficiaries inadvertently or include unintended beneficiaries. Additionally, your children may now be adults who may be better options for successors, trustees, and other agents in place of your parents, siblings, or friends.
We’re here to help. If you or someone you know has questions on whether an estate plan update is required – contact us