Many people make New Year’s resolutions. If one of your resolutions was to make sure your affairs and finances are in order, then you are going to need to review your estate plan – or create one. How do you know if it needs to be changed or updated, or whether you even need one in the first place? Below are a few scenarios that you may want to consider.
There has been a change in your family.
If you have had a death or birth in the family, you will need an attorney to review your plan to make sure that nothing needs to be updated to reflect this change in circumstances. If you have gotten married or gotten divorced, your documents almost certainly need to be updated to reflect this change. The same can be true if you have had a child or beneficiary who has gotten married, gotten divorced, or even one who is experiencing marital problems. Estate plans typically need to be changed in order to reflect the current situation your family is in.
There has been a significant change in your finances.
If you have had a significant increase or decrease in your assets since you last signed your estate planning documents, an attorney may recommend a change to your plan. Those with significantly more assets will need to make sure their estate plan addresses issues such as estate taxes and providing for beneficiaries who are going to inherit a large amount of money. Those who have experienced a decrease in assets may no longer need a plan that was designed to provide for a much larger estate.
You signed your estate plan more than three to five years ago.
Regardless of whether there have been changes in your financial or family situation, the general recommendation is that you should review your estate plan with your attorney every three to five years. There are often changes in the law that may affect your estate plan, and many people do not realize the ways in which those new laws may necessitate a change to what they currently have in place.
You have retirement accounts or qualified funds (annuities, IRAs, TSP, etc.).
At the end of 2019, Congress passed the Setting Every Community up for Retirement Enhancement (SECURE) Act. This law affects the way in which qualified accounts must be distributed to beneficiaries to avoid serious tax consequences. This new law has made it necessary for many of my clients to change the beneficiaries of their qualified accounts. If your estate includes these types of accounts, which can include retirement funds such as IRAs, TSPs, and annuities, you need to schedule a (free) consultation to discuss how to minimize the tax impact on your beneficiaries as a result of this new law.
You anticipate that you will need long-term care in the next few years.
If you are getting older and have started to think about the possibility that in-home care, nursing home care, or even assisted living care is in your near future, it may be time to meet with an attorney to go over your assets and estate plan to make sure that a plan is in place to protect your assets. With the right planning, an elder law attorney can typically protect 100% of your assets from being spent on your care while allowing someone to become eligible for Medicaid or veterans’ benefits.
You do not have a plan in place.
If you do not have a plan in place at all, there is no time like the present! Having a well, thought-out plan is one of the best gifts you can provide your family members and loved ones. At a minimum, everyone over the age of eighteen should have a financial power of attorney and an advance medical directive in place. However, your attorney can also speak with you about how you would like to distribute your assets upon your death and which strategy makes the most sense for your financial and family situation. Although it is not always a fun topic of discussion, executing an estate plan is an important part of planning for the future for yourself and your loved ones.
We recommend scheduling a FREE consultation with Bob Michaels today to learn more!
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Bob Michaels is extremely passionate about providing the best possible legal experience for his clients, and focuses his practice on elder law, estate planning, business, and real estate matters. Bob has been able to provide piece of mind and a solid foundation to many folks in the Puget Sound area over the years and wants to provide resources and relevant information whenever he can.