Gene L. Osofsky, of the law firm Osofsky & Osofsky, asserts that the “when” to update your estate plan is now – especially if you’re a procrastinator.
You thought you were clever when you created an estate plan in the mid-1990s, and you were, for the time being. But now your estate plan documents are contained in a bank’s safety deposit box, gathering dust until they’re needed. Nothing has changed since 1994, right? Right, if you inhabit a vacuum and your family has not grown or changed in any way, and if suspended animation has become your form of existence. According to Gene L. Osofsky, such an existence is more likely in the genres of fantasy and science fiction, but seldom in real life. “If you are living as most people do, changes occur whether you want them or not. There are several reasons to update your estate plan – even if it seemed perfectly fine at one time.”
The passage of time: “This is actually the most common reason people update their estate plans,” Osofsky explains, “You are entitled to change your mind if a more sensible idea comes to mind. If you named your parents as trustees when your children were minors, you might wish to name your now 37-year-old son instead, especially if that much time has elapsed. No disrespect intended to your mom and dad, bless their souls, but now they’re in their early 90s! In addition, certain documents should be re-executed to avoid being perceived as stale.”
The birth or death of a beneficiary or fiduciary: “If you have new children or grandchildren, or a parent or sibling has passed on, it’s time to update,” Osofsky says.
Your own marriage or divorce, or the marriage or divorce of one of your beneficiaries: Says Osofsky, “It’s time.”
Moving to a new state: “Tax, health care, and estate planning laws vary from state to state. If you don’t take this into account, you or your descendants might be in for some rude surprises,” Osofsky insists.
A significant change in your financial status, or in the status of your business: “Your estate plan reflects the size and nature of your assets when you created your original documents. Different strategies might be more effective as the configuration of your estate changes,” says Osofsky.
Changes in tax law: “Back in the 1990s, A-B trust splits were in common use on the first death in order to minimize estate tax. With increasing exemptions, those trust splits may no longer be necessary for the estates of most couples,” Osofsky asserts.
But if none of the above has happened to you, you may be one of the few for whom updating your estate plan is no longer necessary because your procrastination has entered the realm of suspended animation.