by Elizabeth D. Spilotro, Esq.
Drafting a thorough estate plan is the first, critical step toward ensuring your and your family's stability through all that life brings, including its inevitable end. But like cars, estate plans require regular maintenance to make sure they keep running the way they are supposed to. Here are five common events or concerns that should trigger an estate plan review:
- Change in tax laws: In late 2010, the seesawing estate tax question was finally settled for the foreseeable future with an individual exemption of $5 million (indexed for inflation – in 2014 the exemption sits at $5,340,000 per person, so $10,680,000 total can be passed free of tax by a married couple). The increased estate tax exemption means significantly fewer “ordinary people” need to worry about estate taxes – however, their estate plan may still be worried, overplanning in ways that will create unnecessary administrative burdens and tie up assets at the death of the first spouse. An update to the tax planning in your documents can easily address this issue.
- Illness: A well-drafted estate plan should provide for the incapacity of the client as well as distribution of property after death. While a plan may anticipate such incapacity generally, often when illness strikes it casts a plan in a different light – she declines before he does; a person is physically compromised but cognitively stable, or vice versa; the person anticipated to care for the ill individual is no longer available to do the job. Making sure your needs continue to be met as they increase requires attention while you have the chance to give it.
- New definitions of “family”: Same-sex couples clearly need special attention to their own planning to ensure their wishes are documented and followed. But what if your child or grandchild is part of a same-sex couple? You need to ensure you have done your planning to ensure their family is acknowledged in accordance with your wishes as well.
- New additions to the family: Remarriage after widowhood is an obvious situation that would trigger an update to your estate plan. But what about marital changes for your children? Do you have grandchildren born outside of marital relationships? Whether those grandchildren will be recognized under your estate plan can be a complicated issue that requires specific drafting to provide clarity and avoid a fight later.
- Pets: For many of us, pets are family members. When those pets are significantly long-lived and expensive to maintain, such as horses, a pet trust (recognized by state statute in recent years) may be a valuable option to provide for their care.
Your estate planning attorney is an essential resource for you and your family. If your life looks a little different today than it did when you drafted your estate plan, check in to confirm whether you need a simple oil change or a whole new carburetor, or if you are lucky maybe just a quick wash.