A truly effective estate plan is one that is reviewed and updated regularly. Because of the tax law changes of the past years, now may be an especially good time to review your plan.
The following questions can help you determine whether or not it is time to review your estate plan, and if so, on what areas you should focus.
Since I last reviewed my estate plan.
If you answer “yes” to any of the following questions, reviewing your estate plan today is highly recommended.
Are you three years older?
Have you married, divorced, separated, or been widowed?
Have you become a parent?
Have you become a grandparent? If so, do you want to include your grandchildren in your estate plan and take advantage of generation-skipping transfer tax planning?
Have you received an inheritance or are you likely to receive one in the near future?
Have you moved to another state?
Current estate plan
If you answer “no” to any of the following questions, consider reviewing those particular areas of your estate plan.
If you have a living trust, have you transferred title to all your assets to the trust?
Does your estate plan take advantage of 2000’s increased applicable exclusion amount of $675,000?
Are you and your spouse both U.S. citizens? If not, does your estate plan take this into account?
If you are married, have you considered converting your property to Tenants in Common?
Have you been taking full advantage of the $10,000 annual gift-tax exclusion.?
Do you have a healthcare proxy/right to die that reflects your wishes about the use of life support treatment and have you executed a durable power of attorney for financial matters to be used if you should become incapacitated?
Have you considered taking advantage of the substantial tax savings of charitable gift giving?
If you answer “no” to any of the following questions, you may want to revisit the role life insurance plays in your estate plan.
Do you know the total value of your estate?
Do you have sufficient equity in your assets to pay estate taxes and support your family after your death?
Do you have sufficient liquidity to pay estate taxes?
Are your beneficiary designations consistent with your will or living trust?
Qualified benefit plans
If you answer “no” to any of the following questions, look at how retirement benefits affect your estate plan.
Have you considered whether the growth of your profit-sharing plan, pension plan, or individual retirement account (IRA) benefits will affect your estate plan?
Have you confirmed that your beneficiary designations are consistent with your will or living trust?
Now is the time to review your estate plan
Reviewing your estate plan need not involve a lot of time and money. If all is in order, you can have the peace of mind of having this confirmed. If there is a problem, a way to do things better, or a way to save your family taxes, now is the time to learn about it.