If your estate plan or your parent’s estate plan hasn’t been reviewed in the last few years — or the last twenty years — it’s time to review your estate plan — sooner, not later. Rather than fix a messy situation after death, it is best to work with an estate planning attorney to review your estate plan with you now. The following 5 reasons help explain why older documents may no longer work to achieve your or your parents’ wishes.
- Stale documents are disliked by financial institutions. If a power of attorney is more than eight years old, don’t expect it to be received well by a bank or brokerage house. The financial institution will probably want to get an affidavit from the attorney who originally created the document to attest to its validity. A regular review and refresh of estate documents allow for the document to remain current as well as confirm that the individuals named as agents and their contact information.
- State laws change. Changes to state laws alter how estates are handled. They may have a positive impact that could benefit you and your family, but they could also have a negative effect. If the will or trust hasn’t been reviewed in ten or twenty years, you won’t know what consequences new state laws have on your estate planning. More importantly, if the impact is negative, you won’t be able to take advantage of revising your estate planning to protect your estate.
- Lawyers use updated language in estate planning documents. In addition to changes in the law, there are changes to language that may have a big impact on the estate. Many attorneys have changed the language they use for trusts based on the SECURE Act, which went into effect in 2020. If your parent has a retirement account payable to a trust, it’s critical that this language be modified so that it complies with the new law. Lacking these updates, your parent’s estate plan may create unnecessary increases in taxes, fees, or penalties.
- Federal estate laws change over time. Recent years have seen major changes to estate law, from the aforementioned SECURE Act to current proposals to federal exclusions and gift taxes. Is your estate plan (or your parents) in compliance with the new laws? If assets have changed since the last estate plan was written, there may be tax law changes to be incorporated. Are there enough assets available to pay the taxes from the estate or the trusts?
- The decedent’s wishes may not be followed if documents aren’t updated. Over time, individuals die, people get married, children and grandchildren are born, and relationships change. If an individual's wishes are not updated in their estate planning documents, the inheritance may go to individuals that are no longer in the person's life or may leave out important people.
We recommend that our clients review their estate plans with us every three years. This way we can ensure that their estate plans will continue to meet their goals.
If you have any questions about tax and estate planning, please feel free to contact Glick and Trostin, LLC at 312-346-8258.
Disclaimer: The materials on this website are provided for informational purposes only and do not constitute legal advice. Transmission of the information is not intended to create, and receipt does not constitute, an attorney-client relationship between any attorney and any other person, group, or entity. No representations or warranties whatsoever, express or implied are given as to the accuracy or applicability of the information contained herein. No one should rely upon the information contained herein as constituting legal advice. The information may be modified or rendered incorrect by future legislative or judicial developments and may not be applicable to any individual reader's facts and circumstances.
