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The Importance of Reviewing (and Updating) Your Estate Plan

You have an estate plan; you probably even remember creating it. Making the decisions and pulling together the documents was probably time consuming and tedious. The initial process of creating an estate plan can be so painful and involved that people may avoid reviewing it again for years.

Life events such as marriage, separation, divorce, births, deaths, relocation and tax-law changes all impact estate planning needs. Revisiting key elements of your estate plan every few years can correct errors, make adjustments for life changes, and guarantee your current wishes are known. Here are some items to review:

Friends and Family

  • Beneficiary Designations. Be sure life changes make your beneficiary designation selections relevant, and they still reflect your current desires.

  • Legal Roles. Are your powers of attorney and estate executor(s) still competent and can they represent you? Have either of you relocated, causing you to consider if someone living locally could carry out the responsibilities more efficiently?

  • Long-term Care Insurance. Every person moving toward retirement or working in their sunset years should consider long-term care insurance — simply consider the economic impact of a nursing home stay. Long-term care insurance can be an inexpensive alternative if the right policy is purchased at the right time.

Review of Assets

  • Property Titles. Have you established ownership and survivorship in the way you intended? Is it supported by current state titling laws?

  • Business Succession Plans. A significant number of buy/sell agreements require annual revaluation of a business. Not having an updated appraisal presents two concerns: You do not have a current figure for the value of your business for your own planning; and in the event an owner or partner dies, an arbitrator without a true sense of the business will negotiate the reappraisal.

  • Life Insurance. Do you still need your current policy? Do you need a different policy? Is the policy performing as originally illustrated? Policies are affected by interest rates and the investment options. If you expect the policy to provide for a particular need, it is important to review its performance annually.

Staying Current

  • Tax Law Changes. The Internal Revenue Code is regularly changed. In fact, the estate tax rules have undergone significant changes in recent years, and more changes could occur. Your estate plan should be structured to take advantage of current maximum tax benefits; therefore, it may have to be updated when tax laws change.

Organization Eases the Task

Though it can be time consuming, it is worth organizing legal documents in a way that makes them easy to review and update. Be sure to keep documents in a safe or fire-proof cabinet:

  • Document Finder. Lists your legal documents and where they are stored. If access requires a key or password, include instructions on how to find them.

  • Estate Planning Summary. Include a list of professional advisors and passwords for each account (including web access). Adding dates the documents were created can help prompt you to keep your documents up to date.

  • Net Worth Statement. Describes every asset (including account numbers), titling, beneficiaries, and current value. This statement identifies areas for in-depth review and serves as an overview for your estate executor.

These documents ease access of information for those who – in the event of an emergency, or if you become incapacitated – will need to know where to find your estate plan and the legal documents that will guide them in support of your wishes.

Creating an estate plan is just the first part of managing your future; keeping it up to date is essential for the long run. Contact MendenFreiman today if you need an estate plan or would like to update your current estate plan. We are happy to help!

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