A carefully designed, properly implemented estate plan can make all the difference between an orderly transition of your estate and a chaotic scramble among beneficiaries. However, no matter how carefully you have constructed your estate plan documentation, changing circumstances can still render it inadequate.
It pays to revisit your estate plan periodically to ensure that its provisions still meet your needs, especially when certain specific changes impact your life. Here are some changes that should prompt you to take a fresh look at your estate plan, check it for outmoded provisions, and make any necessary revisions.
Changes in Tax Laws
Tax laws change from time to time, and when they do, they can render parts of an estate plan invalid or unsatisfactory. For example, you might have had no concerns about federal estate taxes at the time you drafted the plan, only to discover that changes in these laws now make your estate vulnerable to such taxes.
By contrast, changes in federal estate tax exemption limits may now permit you to leave more to your beneficiaries without worrying about estate taxes. For the year 2020, any individual with an estate worth less than $11.58 million
can claim exemption from the federal estate tax — you may want to adjust your estate plan accordingly.
Estate tax laws can also change at the state level. Keep in mind that even though Florida does not currently impose an estate tax, this situation could theoretically change at some point. Regular consultations with a skilled estate tax attorney can help you react to any such changes as needed.
Changes in Marital Status
The end of a marriage, either through a divorce or through the death of a spouse, can render much of your estate plan obsolete. An estate plan written with shared real property ownership in mind will no longer apply if your spouse has died, thus forcing you to transfer your real property to another beneficiary instead.
You may not want your ex-spouse to inherit your real property or other assets upon your death, even if you had originally planned to leave everything to that person. If you want to make sure that this scenario doesn't occur, make the appropriate changes to your estate plan as soon as possible.
Changes of Location
Relocation can affect your estate plan's validity. For instance, the state of Florida requires you to name an executor who either resides in Florida or can show a relationship to you by marriage or blood. If you now live in Florida but your executor still lives in your previous state of residence, you may have to change executors.
Some aspects of your estate plan may not need changing even if you move from one state to another. This portability holds true for revocable living trusts, which generally remain valid in any state. Beneficiary designations should also remain valid.
The rules for accepting out-of-state medical power of attorney (POA) designations vary from state to state, with some states not imposing any definite rules on the subject at all. Make sure that the healthcare providers in your adopted state recognize the legitimacy of your POA documentation.
Changes Involving POA Agents
At some point, you may need to revise your estate plan to swap one POA agent for another. This need may develop because the agent you had relied on has died, or may decide that you longer need or want that specific individual to have power of attorney over your estate.
You may either change the terms of your POA agreement or cancel the agreement altogether while you remain sound of mind. If you become unsound of mind before you make this change, however, the court will have to see evidence that your POA has worked against your best interest before dissolving the agreement.
If your life circumstances have changed since you prepared your estate plan, a legal team specializing in estate law can help you get that plan up to date. ContactDonald B. Linsky & Associates PA for a consultation.
