Get your will done – check.
Create an advance health care directive – check.
Healthcare power of attorney – check.
Getting the pieces in place of your estate plan is very satisfying but it can also lead to a false sense of security. Creating an estate plan is not a “one and done” thing; it requires regular revisions to ensure that the plan you created still reflects your circumstances, your values, and your wishes.
With that in mind, here’s some advice on when and how to revise your plan.
Revise your estate plan when you have a major life change
Look over all your estate planning documents – plus beneficiaries listed on retirement plans and life insurance policies – when any of the following major events occur in your life:
- Marriage
- Divorce
- Birth or adoption of a child
- Estrangement of a child
- Death of a family member
- Debilitating injury to you or a family member
- Receiving a large inheritance
- Buying, inheriting, or selling a business
- Moving to a new state or new country
Depending on the way your estate plan was created originally, you may not need to make any changes. However, it’s smart to review the plan if any of the above occurs in case these changes impact how the plan plays out.
Revise your estate plan when relevant laws change
The major law that affects estate planning is the federal estate tax exemption. This has been increasing along with inflation from $5 million per individual since 2011, and as of 2017 is at $5.49 million per individual or $10.98 million per couple. This amount can and does change over the years, though. If your estate is large enough to take advantage of this exemption, then pay attention to any changes in the law around it.
That’s for federal exemptions. States have widely varying laws on inheritance and estate taxes and again, if you plan to take advantage of them, plan to pay attention to those numbers, or keep in regular touch with a financial advisor who does.
Ensure that the provisions of your will and living will are still accurate
Every few years, you may want to ask the people you named as guardian of your minor children in your will if they are still okay with being guardian. Likewise, ask your chosen executor and back-up executor(s) if they are still willing to take on the responsibility.
Look at the living wills, also known as advance directive or advance health care directive, you and your spouse made. Have you learned anything since you created your living wills that would change your mind about end-of-life care? Discuss these provisions with your spouse or the person you have elected through a healthcare power of attorney to make decisions for you, if any. Now is a good time to answer any questions they have.
Ensure that your estate plan still reflects your values
Your estate plan is a final opportunity to use your wealth in a strategic and powerful way to make change in the world. If you have already named charitable causes in your will or a trust, check that you still want your money to go to them. Is there any other organization you want to give to? If you haven’t made charitable giving a part of your estate plan, I encourage you to do so. You will be ensuring that your values are put into action by the money that you give. Depending on how you set up your plan, you may also receive some excellent tax benefits.
Revise your plan with the advice of your financial advisor
At the Renn Wealth Management Group, we help people like you decide how best to manage their wealth so you have the financial security you want while living a wonderful life and contributing to the causes you care about. A solid estate plan is an important part of that. If you want to ensure that you’re doing all you can with the wealth you have, give us a call. We can start the conversation.