Establishing a regular cadence of reviews for your estate plan is key to ensuring your plan stays up to date and in line with your wishes.
In addition to these recurring estate planning checkups, consider revisiting your estate plan with your estate planning attorney and financial advisor after the following events:
Family & Relationship Changes
1. Marriage or Domestic Partnership
Marriage and domestic partnerships do not automatically alter the terms of your will or trusts. Reviewing your estate plan after you get married or enter a domestic partnership allows you to adjust your estate plan to include your new spouse or partner. This is especially important if you or your new spouse or partner have children from a prior marriage, as blended families have unique estate planning needs.
Many people use their estate plan to provide for their spouse. Your intentions may change after finalizing a divorce, and you need to update your estate plan to reflect those changes.
3. Birth or Adoption of Children and/or Grandchildren
Once you have children, you will likely want to appoint someone to act as guardian for your children should both you and your spouse pass away. You may also want to revisit your estate plan as your children mature into adults. It is wise to regularly address and update the distribution of assets to your children and/or grandchildren to make sure you do not disinherit anyone unintentionally.
4. Death of a Beneficiary or Executor
Another reason to revisit your estate plan is if someone named as a beneficiary or executor in your estate plan passes away. You can reassess how you want your assets distributed to the remaining beneficiaries and name someone else to act as executor.
5. Purchase of Home or Other Significant Asset
The addition of new assets is another good reason to revisit your estate plan – particularly if these assets significantly alter the overall value of your estate. New assets can affect estate tax implications, so consult with your estate planning and tax advisor to make appropriate changes.
6. Opening, Purchase or Sale of a Business
Buying or selling a business affects the overall value of your estate and potential estate tax burden. Additionally, if you are a business owner, you may want to include a succession plan in your estate plan.
7. Significant Increase or Decrease in an Asset’s Value
If one or more of the assets within your estate significantly changes in value, this could affect your estate’s tax liability. Consult with your financial advisor and estate planning attorney to adjust your estate plan to minimize tax liability while maximizing your estate’s value.
8. Receipt of an Inheritance
An inheritance will likely affect the value of your estate and you may want to consider consulting with your estate planning attorney on how to include these new assets within your estate plan.
9. Move to a New State
While estate planning documents typically transfer from one state to another, you may want to check with your estate planning attorney to verify whether you need to update your estate plan to reflect tax or other estate planning-related laws unique to your new state.
10. Changes in Tax Laws
Tax laws regarding estates change regularly. For example, the estate tax exemption has increased incrementally over the last several years. Consider reviewing your estate plan with your tax advisor and estate planning attorney to find out how these changes may affect your estate plan.
No matter the reason, revisiting your estate plan regularly ensures you pass on your legacy as you intend. At Fifth Third Bank, we’re here to help. Contact a Fifth Third Bank advisor to check if your estate plan is up to date.