You should strive to review your estate plans every few years. While it might not seem like it, many events can occur during this period that impacts your estate planning goals. Besides personal changes, the country also experiences national elections every four years which often lead to changes in estate taxes.
Consider Role Appointments
One of the most critical parts of estate planning is appointing who among your friends and family members will act in the role of executor, power of attorney, and other estate planning positions. You should also question whether the parties you nominate to act in such a role remain fit and willing to act in these positions. It’s also important to remember that the suitability of appointments can change. While a person might seem like a good executor, they might not be a suitable executor a decade from now.
Review the Terms of Your Trusts
Many trusts for non-taxable estates of married couples contain provisions stipulating the division of the trust following the first spouse’s death. While this was once done for estate tax purposes, laws have changed and spouses can now preserve a deceased spouse’s estate tax exemption for later use without the cost or troubles associated with dividing assets into separate trusts. It’s a wise idea to have your trust reviewed by your lawyer to decide if the trust still works appropriately for your situation.
It’s not uncommon for trusts to be created for one situation, but situations sometimes change and the trust is not updated. Some common issues that can impact the role of trust include the death of beneficiaries, beneficiaries who develop substance abuse problems, or other events that make the trust seem like not a wise idea any longer. Other times, a person might have placed assets in a trust until a beneficiary reaches a certain age, but the beneficiary might have legitimate reasons for needing the assets before this date.
Various reasons exist for placing a beneficiary’s share in a trust. You should make sure, however, that every few years, you review the terms of the trust to make sure that it still matches your goals.
Don’t Forget Beneficiary Designations
Various accounts including annuities and life insurance are subject to beneficiary designations. This means that regardless of what you’ve stated in your trust or will, assets found in these accounts are based onto beneficiaries in accordance with separate terms. If you name a former spouse or someone you do not wish to act as a beneficiary, you should make sure that you adequately update the terms of these accounts. Otherwise, your assets might end up passed on in a manner that you do not intend.