Putting together an estate plan may seem like a one and done deal. Although taking that first step and crafting the initial plan may be the most difficult step, it is important to review these documents on a regular basis.
Two specific events that could trigger a need to review your plan include:
- Changes in the law. President Donald Trump promised to reform our nation's tax law, and he delivered. Regardless of your thoughts about the benefits of these changes, it is possible that changes to the tax law will impact your estate plan. One example involves the federal estate tax exclusion amount. The change doubled the value of the estate excluded from federal estate tax obligations. The previous exclusion amount was set at a tax free transfer of $11 million per couple, this amount is now $22 million. Various legal tools are available to help you manage your tax obligations and this change could impact the legal tools that you use to transfer assets. When reviewing these tax obligations, it is important to keep in mind that federal taxes are just one piece of this large and complicated puzzle. You should also discuss state tax obligations.
- Changes in the family. The occurrence of a birth, death, marriage or divorce within the family is a good reason to review your estate plan. These changes may result in the need to establish a trust to help provide funds for a grandchild to attend higher level education or to better ensure the assets go directly to the grandchild and are better protected in the event of a divorce.
These are just a few major events that can signal the need to review an estate plan. It is often wise to seek legal counsel when reviewing these documents. An attorney experienced in estate planning and tax matters can discuss your plan and which legal tools may better help you achieve your goals.