By Libby Banks, the Law Office of Libby Banks, PLLC
Change is inevitable. With estate planning, you put in place the best plan you can at the time. However, as your life proceeds, and the law twists and turns, your plan may need an update. So, when should you review – and possibly renew – your estate plan?
Changes in the Law
One change that can make a difference in your plan isn’t even something you might know about. Federal or state law may change, and your plan might need to be adjusted to address the new laws.
For example, the Arizona Trust Code was enacted in 2008, changing the former trust law completely. If your trust was put in place before 2008, you need a review, because the law on which it was based is now very different.
The federal estate tax exemption has changed over the years as well. The exemption (what you can give away in life and at death without taxes) has been as low as $600,0000 but is now $11.7 million per person. If your estate plan was done when the exemption was low, your plan may be far more complex than what you need if your estate is well below the exemption amount. Putting a simpler plan in place will make it easier for your surviving spouse and children to administer.
The Big Four of Life Events – Marriage, Divorce, Birth and Death
It seems obvious that if you get married or divorced, you need to change your plan. When you leave a marriage, leave the old estate plan and replace it with a new plan. On marrying, don’t forget to change the plan you did before marriage. I’ve had to console the spouse who finds out too late that her husband failed to adjust his plan and didn’t change his life insurance or IRA beneficiaries.
The birth of a child is also an occasion to change your plan or put one in place if you haven’t done so yet. You need to protect that life you brought into the world. Protection includes making sure things are in place for their care if you are no longer here.
Moving From State to State
Another significant life event is a move to another state. While your attorney in your old state may have done a fine job, it is important to be sure that your new home state doesn’t have laws that affect your plan adversely. A local attorney can advise you about whether your existing plan requires changes.
A Review Every Three to Five Years
I recommend that my clients review their trusts with me every three to five years. That way, we can discuss any changes in their lives and in the law and update to be sure the plan is what is needed.
If I can help you, let me know. You can find my contact information at Libbybanks.com or call the office at 602-375-6752.