When To Modify Your Estate Plan
While your Last Will and Testament (will) is certainly an important component of your estate plan, there is more to it than that. In total, your estate plan addresses how you would like the wealth that you have amassed –regardless of its size –to flow to those you love the most while mitigating the tax implications involved. This can be a tall order, but ultimately, your estate plan represents the totality of the blood, sweat, and tears you have poured into growing your legacy and the culmination of your wishes for that legacy. In the end, there may be quite a few documents involved –in addition to your will– including (as applicable):
- Your revocable living trust
- Your life insurance policies
- Your retirement accounts
- Plans for your business
- Your digital estate plan
- Powers of attorney (both medical and financial)
If the only piece of the puzzle that you have addressed to date is your will, it is probably time to modify your estate plan by consulting with an experienced Texas estate planning attorney today.
Updating Your Estate Plan: The Basics
As a rule of thumb, it is a good idea to update your estate plan every three to five years, but this is just an overall game plan. Your estate plan should accurately reflect your wishes regarding your financial legacy, and if these should change, it is time to tweak your estate plan. Further, there are a variety of life’s big events that can –or should– inspire you to update your estate plan, including:
- Marrying or divorcing
- Having additional children or grandchildren
- Needing to change your beneficiaries –in response to marriage or divorce, for example
- Evolving tax implications
- Needing to change your trustee –due to poor health, death, incapacitation, or any other reason
- Needing to update the assignment of powers of attorney –both financial and medical
If you think it might be time to update your estate plan, consider reaching out to the experienced estate planning attorneys at Ibekwe Law, PLLC today.
Marriage and Divorce
Marriage is a major life event, and if you have recently married, it is a good time to think about your estate plan. While marriage provides your spouse with certain inalienable rights, it does not necessarily make your spouse your primary heir. You need a will in place that addresses your spouse’s standing to ensure that he or she receives more of your estate than the state automatically allocates. If the marriage is not your first and you have children from another marriage, it can complicate things further, and you need to give the matter the careful attention it deserves.
Divorce is a similarly huge life event, and if you have recently been divorced, you should update your estate plan. While your ex-spouse is not likely to have any guaranteed legal access to your estate, it is important to remove him or her from your prior plans and as your beneficiary (if this is your intention).
If you created your estate plan before you had children or you have had additional children in the interim –and your estate plan does not address guardianship –it is important to go back and consider revisiting your estate plan. In the unlikely event that you and your children’s other parent both pass before your children reach adulthood, specifying who will take over their guardianship is important not only for your children’s ongoing well-being but also for your peace of mind. Further, as your children age, their role in your estate plan may evolve, and while you will not need to address guardianship, there are other considerations:
- Setting up a trust for your children and grandchildren
- Making one of your children your estate plan’s trustee
- Setting up financial and/or medical powers of attorney in one of your children’s names
Increasing or Decreasing Worth
Generally, the tax implications for your estate will hinge on its overall worth, and there is a threshold amount –at both the federal and state level (in Texas, these are one and the same because Texas no longer has an estate tax)– that trips tax liability. If your estate increases above this threshold or decreases below it, it is a good idea to check in with your estate planning attorney.
Your Estate Plan and Housekeeping
When it comes to whether or not you should modify your estate plan, there are some basic housekeeping rules that it is important to consider, including:
- You move to a new state.
- A guardian, trustee, executor, or someone you have given power of attorney is no longer able to serve in the capacity required.
- There are changes in federal or state estate tax laws.
- You want to change your beneficiaries (after marriage or divorce, for example).
- Five years have passed since your estate plan was reviewed by a practiced estate planning attorney.
If you think it might be time to modify your estate plan, it is very likely a good time to connect with an experienced Texas estate planning attorney.
Reach Out To An Accomplished Texas Estate Planning Attorney Today
If it has been a minute –or you have undergone one of those big deal life moments– it is almost certainly time to modify your estate plan, and the trusted estate planning attorneys at Ibekwe Law, PLLC in Texas can help you. As your life and estate evolve, so too should your estate plan. The consequences of your estate plan are so significant that having the professional legal counsel of a dedicated estate planning attorney in your corner is always an important option to consider. For more information about how we can help you with your estate plan, please do not hesitate to contact or call us at 512-505-2753 today.