Hi, I'm attorney John Mangan from Beacon Legacy LawTM. In my 15 years of practicing law, specifically in the area of trusts and estates, I'm often asked about when is the right time to update an estate plan or at least to have it reviewed.
The answer is going to be different for everyone, but as a general rule, I would suggest that if it's been more than three years since either you put your plan in place or since it's been reviewed, it would probably be a good time to have that plan looked at by a lawyer just to make sure that it's still up to date and well suited to your situation.
What I'm going to share with you today are three common issues that often pop up for people that either need to have their plan reviewed, or maybe they're not even aware of some of these issues yet, but just things that may be going on in your life that would trigger the need to have a review done.
1. Is Everything in Your Plan Accurate and Up-to-Date?
We all know that relationships change. That person who was your best friend 10 years ago might not still be your best friend. And if you've named them as a fiduciary within your documents, either to make financial or healthcare related decisions should you be unable to make them yourself, then you probably want to update those documents.
Consider these important questions:
- Have you gotten married in the last few years or divorced?
- Do you have any additional children or grandchildren?
- Did your choice of beneficiaries change?
- What about the shares that you're leaving to each of your beneficiaries?
- If you have charitable intent, did the organizations that you wish to benefit change?
- Did someone that you care about that you listed in your documents, or perhaps even you yourself, have a name change due to marriage or divorce?
- What about addresses?
If it's been more than 3 years since your plan was reviewed by a lawyer, you really should have it reviewed.
2. Probate Avoidance and Beneficiary Designations
The second thing that we often come across is related to issues on probate avoidance and beneficiary designations. Probate, of course, is the formal settlement of someone's estate after they pass. And to the extent that probate can be avoided or at least its consequences minimized, that's generally a very good goal to strive for.
Since your plan was last put in place, consider these questions:
- Have you opened new accounts?
- Have you changed beneficiaries so that they are up to date, or are the beneficiaries still the folks that you named several years ago and maybe now they're out of date?
- Have you acquired any real estate or other assets that are now listed solely in your individual name?
- As a more modern example, what about cryptocurrency? Have you purchased any of that? And if so, how is that listed?
- Have you started a new business?
If you answered yes to any of these questions, you probably should have your plan reviewed.
3. Federal Estate Tax Law Changes
A third issue to think about has to do with law changes that are specific to estate taxation on a federal level. We've had some very significant changes over the last decade plus. If you have an estate plan that was drafted in 2010 or earlier, there is a very likely probability that your documents do not reflect the changes that have occurred.
Specifically, what happened in 2011 was the advent of portability, which relates to the ability for the surviving spouse to use any portion of the deceased spouse's unused estate tax exemption amount for their own benefit when they die. It's a very important topic that really deserves its own discussion.
Now, at the end of 2025, our current estate tax exemption of almost $12 million this year is set to be reduced significantly to a number adjusted for inflation, which is projected to be about $6.5 million. In other words, there's going to be a reduction in the exemption limits by almost 50% unless Congress acts, which seems unlikely these days.
So, are you prepared for that event when it does happen? If not, then you really should have your plan reviewed.
Take Action Today
What I've shared with you are just three of the most common issues that might trigger someone to need to have their estate plan reviewed or updated. If you answered yes to any of the questions that I've asked throughout this discussion, then you should probably have your plan reviewed.
At Beacon Legacy LawTM, we are happy to help. Please feel free to reach out to us either by phone or through the contact form on our website. We look forward to hearing from you.
