(919) 435-3646

Estate Planning Review Tips

Estate planning documents should be based on your personal circumstances and goals, which usually change over time. Federal and state laws that affect your plan also change over time. If you already have an estate plan in place, good for you! When that plan has a little age on it, dust it off and see whether it still fits you. We recommend to our clients that they review their plan every three to five years and after any major life event.

Here are a few things to consider while you are going over your current estate plan:

  1. Is your general power of attorney appropriate for your stage of life?
    As we age, we often want assistance with certain tasks like paying bills or managing finances. If your power of attorney is effective only after you are incapacitated or incompetent, it is not going to be of any use to you right now. You may need a power of attorney that is effective immediately and allows your Agent to help at your direction. You may also want to give your Agent especially broad powers to help them preserve your assets if you need long-term care down the road.
  2. Does your will do what you want now?
    Does your will have a bequest to someone you are now estranged from or provide a gift to a charity you are no longer involved with? An old will may also have named your siblings or parents as your executor, but now you may have adult children or grandchildren whom you want to name instead. If something should be changed in your will, the time to change it is now.
  3. What kind of trust do you have?
    Trusts are generally the most complex part of an estate plan because they can serve many purposes. They are also typically the part of the plan most affected by changes in tax laws. You may have a trust that was designed a decade ago or so with complex provisions to reduce your and your spouse’s estate taxes. Tax laws, and particularly the federal and NC estate tax exemption amounts, have changed a great deal since then. That type of tax-driven trust may no longer be needed, and it could even be detrimental to your goals. A different type of trust might be better suited to your circumstances now. For instance, you could create a special type of trust within your will that would protect your assets for your spouse should they survive you and need long-term care. If you have qualified retirement accounts like an IRA or 401(k) that your family members will inherit, you may want to consider creating a trust that would reduce the income taxes they will have to pay due to tax code changes effective in 2020.
  4. How are your kids and their kids doing?
    Your will or trust might direct your assets to be given directly to your children or grandchildren in one lump sum at the time of your death or when they reach a certain age. Depending on your descendants’ circumstances now, you may prefer that the assets for one or more of your children be held in trust under your trustee’s supervision for a longer period of time, be distributed more gradually, or be subject to other controlling factors. Certain trusts can also protect a child from losing assets through divorce, illness, or carelessness.
  5. Is anyone you love disabled?
    Life can throw us a lot of curveballs. If anyone you love is disabled and is now receiving or might in the future receive government benefits, whatever you leave them will most likely disrupt those benefits until the assets you have left them are completely spent. Would you rather they continue to receive government benefits for basic needs while also having your gift to improve their quality of life? If so, then you should consider creating a supplemental needs trust for them.
  6. Does your living will or advance directive reflect your current wishes?
    A living will and an advance directive are the same thing. If you have one, it contains your instructions regarding life-sustaining treatment under certain situations and should be kept up to date. For example, many people with an advance directive that restricted the use of mechanical ventilation changed their advance directive recently because such treatment might be necessary to survive COVID-19. Your advance directive should express your wishes, clearly describe the situations under which you would not want life-sustaining measures, and state whether your health care agent can override your advance instructions. The latter can be a good idea in light of medical advances and the difficulty of knowing ahead of time exactly the right decision in every situation.

It is good practice to review your estate plan every few years. To learn more about common types of trusts, the roles of different fiduciaries, and other topics, please browse our other blog posts.

If you think you may need to update one or more of the documents in your plan based on the information above, Rhodes Law Firm, PLLC, would be honored to assist you. Set up an appointment with Attorney Annette Rhodes by emailing us or calling 919-435-3646 to speak with our receptionist.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.