Monthly Archives: January 2016

A New Year Brings New Opportunities

Estate Planning isn’t a “one and done” process.

It would be easy to respond to this assertion by saying “You’re just trying to stay busy.”, and you’d be right, but the fact is that people’s circumstances will change, and often do.  If their estate plans don’t reflect these changes in circumstance, it can sometimes cost their estates far more than it would if they had spent a little money and time making the necessary changes.  The nature of these circumstances will dictate how often people should review and make changes to their estate planning.

Clients of modest means generally don’t have to make frequent changes to their estate plans for financial or tax planning purposes, and this has been the case for a while now with federal estate tax thresholds that have been quite high in comparison to the average person’s estate.  When I recommend changes to clients in this financial category, it usually is due to the fact that a considerable amount of time has passed since their existing Wills and other documents were prepared, and now children are no longer minors in need of guardians, and designated personal representatives and alternate beneficiaries have passed away, or the principal has since divorced and remarried, which may or may not call for something a bit more complicated than what they previously had, depending on their goals and objectives.  These are generally people who may have executed estate plans ten or more years ago, and may alter them once or twice throughout their lifetime, to acknowledge kids becoming adults, persons nominated in various capacities getting older or passing away, or changes in the value of their own estates due to inheritances from other family members.  I may recommend changes to durable and medical powers of attorney more frequently than I will for changes to Wills for many of these people, because entities who rely on these documents (banks, hospitals, brokerage houses) seem to constantly be increasing specific delegations of authority, despite the fact that the enabling statutes contemplate broad, general grants of authority.

For people who have more substantial wealth, I recommend reviewing your estate plans much more frequently, as their wealth tends to compound and accumulate much faster, often putting them in a position of needing to have integrated estate and tax plans in order to avoid unnecessary taxes at the time of death.  This means weighing various options, as complexity can go up, and direct control goes down when utilizing tax mitigation strategies.  These are conversations that need to include accountants, as well as the attorney, because mistakes can be costly, and integration is important.

In closing, change comes to every life.  Sometimes the changes are big.  Sometimes they are small, but they are cumulative.  Births, deaths, divorces, inheritances, windfalls, “the magic of compounding”, and divorces are all changes which should prompt you to make an appointment with your attorney to discuss whether or not you should change your estate plans, and if so, to what degree.   Is it a simple codicil to your Will, or is it starting all over and  adding trust provisions?  Attorneys, and sometimes accountants, can help you answer these questions, and maybe help you save a considerable sum of money and heartache for your loved ones.


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