There is no
hard and fast rule about when an estate plan should be reviewed. However, with
the new tax laws going into effect this year, it is probably as good a time as
any.
As with any major life event,
changes in the tax laws affect us all. For many Americans, an eleven million
dollar estate tax exemption amount per individual means very few citizens will
need to plan to avoid federal estate tax. However, there is a punitive State
estate tax in Illinois, and that exemption amount is far less. The State estate
tax lacks what is called “portability.” Without proper planning, you may be
saddling your survivors with a large State tax liability that could have easily been
avoided.
What should you be reviewing? First and
foremost, you need to make sure the estate plan still accomplishes the goals
that were set out. Do my assets go where I want? Are my loved ones protected
and will they be taken care of?Next, are the individuals appointed to fill positions still able to do so? Are they alive? Are they capable? Do I still want those people to fill those roles? Your sister, who was your best friend but hasn’t spoke to you in five years, may not be the right person to raise your kids anymore.
Finally, you should make sure your assets are owned in a way that does not thwart your planning objectives. And consider: Do I want to make any gifts while I’m alive?
An estate plan is not a “set it and forget it” deal. It is ever evolving and always needs to adapt to changing life circumstances. An hour reviewing the plan with a competent attorney could save you or your loved ones a lot of time, money, and effort in the long run.
