That’s right, woodchuck-chuckers, it’s Groundhog Day!
Feb 2, 2017
In the now-classic comedy “Groundhog Day”, Bill Murray’s Phil finds himself trapped on the same day, February 2nd, waking each morning to experience the same events over and over again. While there are times in which we too feel like we are stuck in Groundhog Day as our daily lives can become repetitive, the reality is that the only constant in our lives is change. Some changes are sudden and extreme while some are gradual and barely noticeable. Either way, the changes effects of these changes can usually be felt in a number of areas of our lives. Particularly concerning changes in your family life, your assets, and tax laws, you will want to consider how these changes impact your estate plan. This would usually include the will or trust, powers of attorney that name an agent to make health care and financial decisions on your behalf, and beneficiary designations on life insurance, retirement accounts, and other assets.
A Change in Your Family
Perhaps the most obvious reason to update your estate plan is if your family changes. This could mean a new child, a marriage, a divorce, or the loss of a loved one. For example, if your original estate plan did not anticipate children, presumably you will want to make certain that your children are the beneficiaries of your estate plan and ensure that you have named a guardian to take care of your children if anything happened to you.
Likewise, a marriage or divorce should prompt you to revisit your estate plan. If you created an estate plan as a single adult and named your parents as your agent under a power of attorney, you will likely want to amend your plan to name your spouse. Conversely, if the beneficiary named in your estate plan is now an ex-spouse, you will likely want to amend your estate plan to ensure that you are not making undesired gifts to that person.
Finally, a change in family could simply mean the passage of time. You may have created an estate plan when your children were young, but if your children are now responsible adults, you might want to name your adult child as a successor trustee or an agent under a power of attorney. Alternatively, if you named a parent to act as a guardian or successor trustee, as your parent ages, you might want to name another family member to act in that role.
A Change in Your Assets
A minor change in your assets, like an annual raise, is probably not cause to act. But if you have a major change in your net worth (either suddenly or over time) or have a major change in the types of assets you own, you should update your estate plan. If you have a major increase in net worth, it is worth considering whether you will have estate tax liability at your death and if so, how you can minimize that liability. Additionally, if you purchase or start a business, the people whom you might want to inherit it might not be the same as for your other assets.
A Change in the Law
Changes to laws often affect estate planning. Your estate planning attorney would probably alert you if there is a major change in the law that may affect your estate plan. Other relevant law changes can be addressed by that attorney whenever you review and update your estate plan.
An estate plan can give you a sense of relief. But creating your estate plan should not be the last time you think about it. Every three-to-five years or whenever there is a change in your family, a major change in your assets, or a relevant change in the law, you should revisit your estate plan to ensure that it reflects your current wishes. No matter the reason for making changes to your estate plan, you will want to consider your entire estate plan and not just your will or trust. An estate planning attorney can help you ensure that your entire estate plan is consistent with your wishes.
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