There are three critical aspects to estate planning. Let’s review: first, a customized set of documents unique to your situation and goals should be the foundation of your plan; second; the plan must be properly and completely funded (your assets must actually be transferred into the plan). So what’s the third?
Once you have your documents in place and your plan fully funded, you can’t simply stick it on your shelf, check it off your bucket list, and assume it will work like you need it to 20 or 30 years from now. If you don’t periodically review (and update, when necessary) your plan you have only managed to buy yourself a false sense of security.
Over time your assets will change. You may buy property; you may sell property. Your stock portfolio may lose value; you may receive an inheritance. There are thousands of things which can – and will – change with your estate (your estate is simply the legal way of saying, “all the stuff you own”). Your plan needs to adapt and transform to your changing financial situation.
Over time your family dynamic will change. There may be births; there may be deaths. There may be marriages; there may be divorces. Your kids will grow up; you may have grandkids on the horizon. Your plan needs to acclimate and adjust to your ever evolving family.
Over time the laws regarding estate planning will change. For example, the estate tax exemption has been as low as $600,000 and as high as unlimited over the last two decades. The estate tax rate has been as high as 55% and as low as 35% over that same period. The laws in this area change all the time. Your plan needs to change and adapt to meet whatever new laws Washington throws at you from year to year.
That’s why my firm reviews our clients’ plans every 1 to 3 years – at no additional charge. And if your plan isn’t being reviewed at least as often, you may be living with a false sense of security… and ultimately, it’s your family’s security that’s on the line. Do NOT let that happen!
You cared enough to put a plan in place. Make sure it is up to date with your present situation, your family goals, and the current laws. That’s the only way to ensure your plan will protect and provide for your family as you intend, when it’s needed.
If you already have a plan in place and haven’t had it reviewed recently, it’s time for a checkup. And if you’re ready to put a plan in place to provide the protection your family deserves, be sure to ask your attorney how often they will review the plan and how much extra that will cost.
I recommend putting an attorney on your team who will take care of all that for you, so you don’t even have to think about it. That’s the only real way to make sure it’s not forgotten about and that your plan stays up to date, providing a “real” sense of security rather than a false one.