Is It Time to Update Your Estate Plan?

I recently attended a continuing education course on estate planning, specifically surrounding outdated wills and estate strategies. I had several great takeaways from the session, but the one that stuck out the most was that the average individual’s estate plan is outdated or needs updating after approximately seven years for some reason or another. I’ve seen this hold true as I’ve reviewed clients’, and my own, estate documents since then. Below are a few items to consider when deciding if your own estate documents need to be updated this year.

Have you had children since you last executed your wills?

A common stage of life to execute wills for a couple is when there are children to plan for. If you already had a Will in place prior to having children, you should consider how assets will be distributed to them, what kind of asset protection you may want to provide when passing on assets, and who would care for your children if you were to pass away before they became adults. If you or your children have adopted children since your original Will, confirm with your attorney that they will be included in your Will if that is your wish.

Have your wishes or family dynamics changed?

As time goes on, it is common that your dynamics with certain family or friends will change. Review your Will to confirm that any specific bequests to an individual are still as you wish. Another area that deserves a second look is who’s listed as your executor and/or alternate executor. If you find that the person listed is someone you have not spoken to in years, you may consider updating. If you have children that have become trustworthy adults, it may make sense to include them as an executor versus a friend similar in age to you as your life progresses.

Have you had an increase in wealth/assets?

If your estate documents fall past the referenced seven-year mark, it wouldn’t be surprising that your assets may have grown. Maybe you yourself received an inheritance from someone creating a larger net worth than you expected. Maybe you started a business that’s taken off or have had properties that have grown greatly in value. All these possibilities and more may be worth reviewing with your CERTIFIED FINANCIAL PLANNER™ professional and attorney to ensure that you’re approaching your estate planning correctly.

Have there been any changes to tax law that may be impactful?

Last, but certainly not least, take inventory of the tax implications of your potential estate if you were to die tomorrow or five years from now. On the horizon, the Tax Cuts and Jobs Act (TCJA) is set to sunset at the end of 2025. With it, lifetime estate and gift tax exemptions are set to almost cut in half from what they are currently ($12.92 million for individuals or $25.84 million for married couples down to approximately seven and fourteen million respectively).  If you fall into the group that will be impacted, now is the time to start working with your CFP® professional and attorney to ensure that any needed changes are implemented well before the end of 2025.

If you’ve found yourself at the end of this list knowing that there are changes you need and or want to make, don’t put off contacting your trusted professionals for help. If you do not currently have any estate documents in place, don’t fret, but do take the time to begin this process. Whatever stage you find yourself in, contact your attorney or CERTIFIED FINANCIAL PLANNER™ professional to discuss what changes may be right for you.

 

Published in the Victoria Advocate

Sara Potts is a CFP® professional and Lead Advisor with Keller Wealth Advisors.