Is it Time to Review and Update Your Estate Plan?

It is a good idea to periodically review your will, health care proxy, living will, power of attorney and trust agreements to see if the contents of the documents still adequately reflect your wishes.

Typically, a change in family circumstances, such as a marriage, divorce, remarriage, or the birth of children, may necessitate revisions to your estate planning documents. If you have moved your residence or purchased property in another state, you should consult with an attorney in order to determine what modifications to your estate plan may be required as a result of the move and/or purchase.

It is also imperative that you keep a current inventory of your assets and that you review the titling of the assets and the beneficiary designations, if any. This is important for several reasons. For estate tax purposes, you need to know the total value of all your assets in order to determine if you have an estate tax problem. Additionally, if something happens to you, your heirs should be able to locate your assets fairly readily, without having to dig through papers and conduct time-consuming searches. Perhaps more importantly, you need to check the ownership of your assets. If you have made any provision for the creation of trusts under your will or pursuant to a revocable living trust, the assets should be titled so that they pass according to the terms of the trust. A common problem is that spouses fail to separate their assets in order to fund testamentary trusts, thus resulting in an estate tax problem.

You should look to see if any of your children are joint owners of any of your assets. If a child is a joint owner, the asset will automatically pass to that child upon your death, regardless of what your will says. Such a joint ownership necessarily means that the child has present ownership rights. If that child were to get involved in a divorce proceeding or other litigation, the asset might be at risk. Beneficiary designa-

tions on annuities, life insurance policies, IRAs and other types of retirement accounts should also be reviewed to make sure they are current and properly reflect your desires and estate planning goals. A frequent misunderstanding is that the terms of one’s will controls the disposition of one’s assets; however, that is not true if assets are jointly owned or list beneficiaries. In those instances, the beneficiary designation or form of ownership actually supersedes the terms of one’s will.

In summary, it is important to take the time to periodically review your estate plan, especially with the guidance of an attorney experienced in estate planning.


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IRS Circular 230 disclosure: We inform you that any tax advice contained in this communication is not intended or written to be used, and may not be used by your or anyone else for the purpose of avoiding penalties imposed under the Internal Revenue Code.