You may feel a weight lifted off your shoulders after creating your estate plan. However, your estate plan is not just a one-time thing you complete. You need to review your estate plan and update it accordingly to make sure everything is up-to-date and accurate as your family and finances change.
Your will, trust and other estate planning documents should be reviewed every few years and after significant changes, such as the birth of a grandchild or divorce.
How do you know when to review and update your estate plan? Below are some issues to consider when it comes to updating your estate plan.
- The Health Insurance Portability and Accountability Act (HIPPA) has strict guidelines for disclosing "protected health information." HIPPA regulations can make life very hard for your executor or trustee. If your estate plan was created before April 14, 2003, you need to have it reviewed and revised to ensure proper language is now included.
- The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. This increased the federal estate tax exclusion to $5 million for 2010 and includes inflation for the following years. In 2015, the amount is $5.43 million.
- The American Taxpayer Relief Act of 2012 in January 2013 applies to married couples who have a combined taxable estate over $5.43 million.
These laws and new guidelines need to be considered when revising your estate plan as they can make a significant impact on your estate. It is important to make sure your estate plan is up-to-date and accurate, especially when it comes to new laws and stipulations that will impact your beneficiaries. An estate planning attorney can review your specific situation and create a new strategy to protect your estate and your loved ones.
Source: MarketWatch, "Check the 'freshness date' on your will," Dan Prebish, Accessed Nov. 23, 2015