Estate Planning is a Work in Progress; Is Your Current Plan Current?
When was your Will last updated? Are the people designated to serve as executor of your estate or guardian for your minor children still suitable for this role? Given the recent changes in the federal death tax laws, do your estate plan documents include appropriate provisions for tax planning? Some people mistakenly believe that once their estate plan documents are prepared, they no longer need to be concerned with planning. Changes either in the laws or a person’s circumstances, however, may require modifying the original estate plan.
One reason why people may need to update their estate plan documents is that one or more of the fiduciaries designated in the documents may no longer be appropriate for the role. For example, adult children often designate their parents to serve as executors or trustees or as guardians for minor children. As time moves on, aging parents may no longer be willing or able to serve in these roles. Similarly, people who designate close family friends in fiduciary roles often decide years later that these friends are no longer appropriate, either because the dynamics of the friendship have changed, they no longer live in close proximity, there has been a change in personal values, or for other important reasons.
Another reason why people may need to update their estate plan documents is that changes in relevant laws occur from time to time, which may cause the documents to become obsolete or inappropriate. For example, significant changes in the federal death tax laws occurred in 2013, which helped to simplify tax planning for many people and reduced the need to use trusts for this type of planning. As another example, the Nebraska legislature recently changed the laws regarding powers of attorney, and so, depending on the circumstances, it may be advisable to execute a new power of attorney document that conforms to the current laws.
Generally, people should consider the more important provisions of their estate plan at least once a year. It may be helpful to remember this in conjunction with making New Year’s resolutions or filing annual income tax returns. Meeting with their attorney every several years for a more comprehensive review of their plan and to discuss any recent changes in the laws which may affect their planning is also prudent. Of course, people should consider updating their documents whenever a significant life event occurs, such as the death or disability of a close family member, the birth of a new child or grandchild, or a family member’s divorce or other change of circumstances.
Be sure to consult with your attorney periodically to help ensure that your plan reflects your desires as the years pass. Preparing and regularly updating your estate plan documents can help ensure your wishes are carried out when the need finally arises.
by James A. Tews