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Estate Planning

How to Keep Wealth in the Family

10 Estate Planning Pitfalls

When did you last review your Estate Plan?

If the answer is when you first signed the stack of documents at your attorney’s office or don’t remember, it may be time to revisit it. Many of us complete an estate plan and then fail to revisit it for years (and some never do).

Life, however, keeps changing, so do tax laws. Major life events, such as a birth, marriage, divorce, or death occur. At a minimum, an estate plan should be dusted off and revisited at least every three to five years, to help ensure alignment with current laws and make sure your wishes are in place.

So twenty years removed from the “I should think about my estate” narrative, are you at risk of losing everything you for which you’ve planned?

Legally, yes. Laws governing estate planning and taxation have drastically changed over the course of two decades, specifically within estate tax thresholds. What was once a threshold of a few hundred thousand dollars per person has now reached the staggering millions. Meaning, what was once planned for in 1997 could mean absolutely nothing in 2017. Further, assigning trustees to your theoretical estate along with executors for a will, aren’t what they once were.

Relationships change over time: spouses leave, adult children are factored in, family members pass away. So that person you once trusted with your entire post-life arrangements may not be your choice for today. Add to that newly minted retirement plans, Social Security, pensions, life insurance policies and investments, and evolution is obvious. Your net worth and assets have hopefully risen over the course of twenty years, or perhaps they’ve even fallen. However, your estate plans should reflect all of it.

Most people aren’t in constant communication with their attorneys and financial advisors, asking them to amend every document as money comes and goes. It’s also not the most exciting thought to be planning for after you’re gone. The preparation, though, is priceless. The greatest defense is to make an annual audit of your net worth, as well the people with whom you place your trust. If anything has changed, inform your counsel. Checking-in every 12 months will ensure that your documents are up to date so that in the event of a major life change, your estate will be protected. Baby boomers were born from an arguably unplanned era, yet their estate should be everything but unplanned.

Below is a list of 10 common pitfalls of an outdated estate plan. If any apply to you it may be advisable to update your plan:

  1. Who are your executor and trustee?

  2. Are your children properly protected?

  3. Are you aware of your HIPAA Rights?

  4. Has your wealth status changed?

  5. Do you still live in the same state?

  6. Have you remarried?

  7. Would you like to help a charity?

  8. What’s your tax liability?

  9. Is your life insurance adequate?

  10. Is your family on board with your plans?

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