Estate Planning

We All Need a Yearly Check-up: Your Estate Plan Does Too

We go to the doctor to get our check-up’s just to make sure that we are in good health and to detect and treat any problems that we may not even have been aware of. These are the very same reasons why it is important to do annual reviews of your estate planning documents; to make sure your plans are up to date and detect any issues that could arise from your plans as your life has changed.

Don’t have an estate plan? An ounce of prevention is worth a pound of cure.

It can be difficult to talk about planning for death or illness, but the truth is, none of us know what tomorrow brings and the discomfort of having the tough conversation about plans for incapacity or death are minor in comparison to the suffering and discomfort that will inevitably occur for your family members if you don’t have a plan in place.

If you do not have, for example, a Health Care Power of Attorney document prepared, and therefore do not have an agent named to make medical decisions on your behalf, should you become ill or unable to make decisions for yourself, the court will decide who should make those decisions for you. If you do not have a Will or Trust in place, the court will have to decide things like who should take care of your minor children, who will receive and handle the money, assets, and property that you leave behind when you die and all the while your family that is already grieving over your loss is suffering through a lengthy probate process to work through those discrepancies within the court.

Does your estate plan need to be reviewed? Make sure it has a clean bill of health.

Your life and the laws are constantly changing—therefore it is critical that your estate plan changes too. Even if you already have an estate plan, it’s important to have it reviewed and potentially revised regularly depending on how much your life circumstances have changed. At Pierce Law Group, we know how important these regular reviews are which is why if you hired us to prepare your plans, we will review them at no cost to you.

Changes in life

The likelihood of something changing in your life since you had your estate plan prepared is high. Anything from marriages, divorces, having children, death of loved ones, or children aging from minors to adults will likely affect the plans you have in place. Therefore, it is critical that you update your plans to reflect those changes. Consider that you originally named your spouse to be a beneficiary in your Will but later divorced him or her. If you do not update your plan and change the beneficiary named from your ex-spouse to a different individual, upon your death, your ex-spouse is entitled to receive the assets and property that you originally named. This is just one of the many life changes that could significantly impact your estate plan and call for revisions. You should not only review who you have named to receive your money and property after your death, but you should also verify that the people you have named to carry out roles such as executor, trustee, power of attorney, or guardian of your children are still capable and willing to fulfill these roles and that you still feel confident that they are a good fit for those roles. Other changes such as new property, a new home, or differences in your financial status (maybe due to a loss or change of a job, or an inheritance or new assets that you acquired) will likely call for changes in your estate plan as well and there may be a different approach in your planning to give you the most beneficial tax outcome as well.

Changes in the law

There are constantly changes in the law (specifically federal tax law) that affect millions of Americans and provide even more reason to update your estate plan as these laws change.

This year, a perfect example of a change in law that could cause you to update your plans is the “Setting Every Community Up for Retirement Enhancement Act”, also known as the SECURE Act. This law became effective January 1, 2020 and took away the maximum age for traditional IRA contributions to certain retirement accounts and increased the age at which people are required to start taking distributions. However, it also eliminates the tax advantage previously available to many beneficiaries who were able to take distributions from those accounts over their individual life expectancy. Now, many beneficiaries must withdraw the entire balance within ten years of the account holder’s death, accelerating the income tax due and possibly shifting them into a higher tax bracket.

Without going into too much detail about all of the ways that the laws can change, this simple example is one of many that shows how important it is to leave it up to your estate planning attorney to stay up to date on the changes in the law and to help you navigate how those changes could affect your plans and how they should be changed upon review and bring the most benefit to you and your loved ones.

Don’t worry, this won’t hurt a bit

At Pierce Law Group, we are here to help make the process of setting up and reviewing your estate plan as smooth and seamless as possible. The consequences of failing to plan are too great to risk so call us today at 919-584-5556 to set up an initial consultation with one of our experienced estate planning attorneys so that we can help you set up or review your plans right away.