When was the last time you revisited your estate planning? Chances are, it was when you signed a stack of documents at your attorney’s office. Many individuals create an estate plan but fail to update it for years, leading to potential pitfalls in their strategies.
Importance of Regular Review
It is crucial to review your estate plan periodically due to changing laws and significant life events such as marriage, birth, divorce, or the death of a family member. Experts recommend updating your plan every 3 to 5 years to ensure compliance with current regulations. Let’s explore why many estate planning strategies falter during the probate process.
Fiduciary Responsibilities
An executor or fiduciary is appointed to manage someone’s estate legally. It is their duty to act in the best interests of the beneficiaries. Therefore, selecting the right individuals to represent your estate is vital for the success of your estate planning strategies. Executors oversee the estate during probate, handling assets, debts, expenses, and tax filings.
Trustee Duties
A trustee manages assets held in trusts, which may have been established during the individual’s lifetime. While an executor’s role is temporary, a trustee’s responsibilities may continue indefinitely or until the trust terminates. Trustees distribute assets to beneficiaries according to the trust agreement.
Considerations for Growing Children
When children are young, parents often designate guardians for them in their estate plans. However, as children grow into adulthood, the need for a guardian may diminish. It is essential to update your estate plan to accommodate changes such as children getting married or having their own families. Failure to consider these factors can lead to complications in the future.
Wealth Accumulation Updates
Financial security is a common goal, but accumulating wealth can introduce complexities. Increased wealth may result in higher annual taxes and estate values, affecting future estate taxes. It is crucial to update your estate plan to reflect recent wealth accumulation and ensure that your assets are distributed according to your current wishes.
Conclusion: Regular Updates are Key
Estate planning is not a one-time task; it requires regular review and updates to align with changing circumstances. By revisiting your estate documents every few years, you can avoid complications during the probate process and ensure that your wishes are carried out effectively. Remember, unexpected situations may arise, so staying prepared is essential. If you need assistance, consider consulting a probate lawyer for guidance.
