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Top 5 Reasons to Review Your Estate Plan

June 2016

1. Marriage, Remarriage or Divorce: Under most State laws, marriage itself drastically affects the laws that would apply at your death. Spouses have the ability in most States, including Wisconsin, to make claims against your estate if you die without a Will or Trust. Additionally, in the event of divorce or remarriage, any prior planning must be reviewed and updated. This is especially true if you have minor children that you have named as beneficiaries of your assets but do not necessarily want your ex-spouse to have control over those assets as the guardian of your minor children at your death.
2. Birth or Adoption of a Child: any new addition to your family should trigger a review of your estate plan. This needs to be completed to ensure that the new child is included as an heir of your estate. However, just as important, are considerations involving the age when a child receives an inheritance and any asset protection concerns like special needs.
3. Illness or Disability: if you or one of your intended beneficiaries or agents becomes disabled it can cause major issues even if you have a properly drafted estate plan. Successors may need to be added to replace agents who are suddenly unable to act on your behalf. This would include changing or adding new individuals that were appointed as a Power of Attorney, Personal Representative or Trustee. More importantly, if you named someone as a beneficiary of your estate or specific assets and they have since become disabled, giving them the assets could interfere with their eligibility for the public benefits they are receiving or prevent them from being eligible.
4. Death of a Beneficiary: there are many unintentional consequences that may come about when a beneficiary under your estate plan passes away. It could create a situation where some beneficiaries get more that you intended and other get less or even completely disinherited. Even though you listed a beneficiary, their death could also cause your estate to go through probate and intestate succession where heirs would need to be found.
5. Changes in the Law: It goes without saying that laws continually change. I recently met with a couple that completed an estate plan in 2000. At that time estate taxes would apply to estates worth more than $675,000. Since then the estate tax was actually repealed for one year and then substantially increased. Currently it is $5.45 million and increases each year with inflation. The plan the couple had based on the 2000 laws would have actually caused substantial income tax issues if the husband would have passed away. Changes to the Medicaid laws have been even more numerous and drastic due to the Federal and State budget shortfalls. Simply stated, the best asset protection tools of yesterday may be completely ineffective, detrimental or even illegal today.

While these are the some of the most common reasons to review your estate plan it is always good practice to have your estate plan reviewed every five years by an attorney who focuses exclusively on estate planning.