The start of a new year is a good time to look back at what personal and financial changes have occurred over the last year and how they may impact your estate plan. Even if you don’t have to worry about an estate tax, you still should review your estate plan to ensure you are protecting yourself, your loved ones and your business (if you have one) in the event of your death or disability.

Many people routinely procrastinate about estate planning. No matter your stage in life or your net worth, proper estate planning is essential. If you’ve never done any estate planning or you haven’t reviewed your estate plan in a while, now is a good time to consider your circumstances and determine what is needed to protect those who rely on you.

You should regularly review your estate plan, but if any of these changes have happened to you in the last year it is especially important:

  • Did you have a change in family relationships (births, deaths, divorce, etc.)? Any of these can have a significant impact on your estate plan. There are 6 types of key documents which should be reviewed or drafted, including wills, trusts, insurance policies, and other documents. For each of these documents, you may need to change the terms or revise the beneficiaries and appointments. For example, one of the most important things for parents is to make sure they appoint a guardian for minor children.
  • How is your health? As you age, you should also be planning for long-term care. However, no matter your age and health, an unexpected disability can occur anytime. If you or your spouse became mentally or physically incapacitated, who would make health and financial decisions? Executing a Health Care Proxy, Living Will, and a Power of Attorney ensures that important decisions can be made by someone you trust and no one has to go to court to obtain appointment of a guardian. In addition, it helps to avoid potential family conflict and stress over determining your wishes.
  • Have your family finances changed? As your wealth increases, there may be beneficial strategies that can help minimize taxes during your life and also taxes on your estate. If estate taxes are not an issue for you, you still may want to consider setting aside funds in trusts and making gifts (charitable or otherwise) if you can afford it. Alternatively, if someone in the family is in debt or has need of additional funds, setting up a trust can restrict access to money and protect it from creditors.
  • Did you buy/start a business? Are you considering your business exit plan? Every business should have a business succession plan. You should plan for both disability and death to ensure that your desires are met and you don’t leave your family, business partners or employees to deal with a mess.

If you are interested in developing or updating your estate plan, contact us for a consultation.

Learn more about our Trust and Estates practice.