An estate plan is not something you want to leave stagnant. You should update it regularly throughout your life, such as when tax law changes, so that you can take full advantage of new provisions. Ideally, you will change your will and trust numerous times, especially in your golden years.
Your health and financial situation will change over the course of decades. Therefore, you should keep the following points in mind as you consider what you need to do to your estate plan when you are in your 70s and 80s.
Review beneficiaries
Beneficiaries you designated when you were in your 40s may not make sense any longer now that you are in your 80s. For example, if you undergo a divorce, then you likely do not want your ex-spouse to receive a substantial amount of your money. Many experts recommend simply changing your will and trust after major life events, such as divorce, birth of a child or death of a child.
Consider charitable gifts
Estate and income taxes will always play a role in any estate plan. However, you can reduce their impact by making charitable gifts while you are still alive. It can save your beneficiaries a lot of money in the long run, and you will know you have made a wonderful impact in the world now.
Anticipate incapacity
It is an unfortunate reality that many people spend their last few years of life in an incapacitated state. They may be unable to speak or perform basic actions. That is why before that happens, you want to designate a financial and healthcare power of attorney. You want to give certain people the power to make decisions on your behalf in the event you cannot make them independently. By doing so in advance, you can determine who will make these decisions and what type of decisions they may make. Absent powers of attorney, it may be necessary to go to court to obtain a conservatorship or guardianship, which is much more costly and time-consuming.