If you already have an estate plan, great! You are ahead of most of your peers as a recent study shows that roughly 67% of Americans do not have an estate plan at all. But, don’t celebrate just yet. Even though you have an estate plan, now is a good time to ask yourself, “how old is my estate plan and should it be updated?” While the passage of time alone will not invalidate your estate plan, the changes that occurred during that time passage will impact the efficacy of your estate plan. In this article I will focus on 4 reasons why an estate plan may need to be updated. There are many more reasons why a person should update their estate plan, these 4 items are not exhaustive.
1. Changes in the law. Our laws are not stagnant. It is highly likely that there have been changes to the laws since you originally signed your estate documents. It is also highly likely that these changes will impact how your estate plan functions. For example, if your estate plan was drafted before 2012, then it may contain outdated estate tax planning provisions.
2. Changed relationships and circumstances. When you created your initial estate plan you assigned jobs to various people (referred to as your fiduciaries). You likely appointed an executor, trustee, maybe a guardian as well. As time passes, people change. Likewise, our relationships with people change overtime. If your documents were drafted a long time ago, it is possible that your appointed fiduciaries are no longer the appropriate people for those jobs. Additionally, the circumstances of people’s lives change as well. When you initially created your estate plan you spoke to your fiduciaries to get their permission to list them in your documents. If this was many years ago, you should contact your fiduciaries and confirm that they are still willing and able to take on this task.
3. Changes in your wealth and/or asset composition. Your estate plan was likely tailored to the net worth, assets and income that you had when you initially created your estate plan. Significant changes in your net worth or asset composition can impact the effectiveness of your estate plan. If you acquired new assets from the time you created your estate plan and now, then you may want to have your estate plan evaluated to see if any changes are needed.
4. Digital Asset Access. The past decade has seen advances in the variety and complexity of digital assets. If your estate plan is more than 10 years old, it is highly likely that the existence of these assets was not even contemplated when you planned your estate. Digital assets don’t just include cryptocurrency and NFTs, it also includes social media, email accounts, digital photos, Amazon points, airline miles, etc. The way we plan for these assets needs to be addressed in the estate plan itself.
The above 4 items are just examples of reasons why an estate plan may need to be updated. You should speak with an estate attorney to evaluate your documents and see if any changes need to be made. Reznik Law is available to help. Attorney, Orly Reznik, is a board certified estate planning and probate specialist. You can find out more about the firm and her services on our website, www.carywills.com.
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