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Time to Review Your Estate Plan

What is an Estate Plan?  It states who gets your assets at your death.  Your Wills, Durable Power of Attorney and Health Care Directive comprise your Estate Plan.  

There are 2 types:

1) The Default- Created by the state in which you live.  You may not like it’s terms.  

2) The one you make and customize to your goals and objectives.  This one overrides the state’s version.  

Everyday personal and family changes can make yesterday’s well-devised estate plan inadequate today.  Here are some events that may signal that you want to review and update your estate plan.

Births You probably will want to consider the needs of a new child or grandchild in planning you estate.

Deaths The death of your spouse or another beneficiary can greatly affect your plan.  So, too, can the death of your executor, your children’s guardian, or your trustee.

Marriages  If you marry (or RE-marry), you most certainly will want to review your estate plan.  When your children marry, you may want to revise your plan.  

Divorces  Having your “ex” as your Power of Attorney much less receive your assets at your death usually does not “sit well”.  Thus, it is very wise and prudent to review your estate plan immediately following a divorce.  It is also very important to review your beneficiary designation on your 401(k), IRA and Life Insurance policies.  And don’t forget the impact of your Will if your son and daughter in law get divorced.  For example, if your Will gives your son and his wife joint ownership in your home, think of the problems that could arise if they are divorced and you haven’t revised your Will.  

Moving Out of State  If you move to a new state, your estate will  be settled according to the laws of that state.  Certain provisions of your estate plan that are valid in your current state could be invalid under the laws of the new state.  Also, having your executor and witnesses to your Will residing in a state hundreds or even thousands of miles away could hamper the administration and settlement of your estate.

Changes in Estate Composition  A substantial increase or decrease in the types of assets or the value of the estate since you last designed your estate plan may throw your plan off kilter and make a review or revision necessary.  

Business Changes  If you own ANY type of business, certain business changes signal it’s time for an estate plan review.  These changes include starting, buying or selling a business; entering into a buy-sell agreement that provides for the sale of your business interest when you retire, become disabled or die.; changing your business’ legal form; and the death of a business partner or another important member of your firm.  

Federal and State Tax Law Changes  On average, the tax law changes every couple of years.  Any changes in the law may impact how your estate plan works.  Periodic review and updating is very wise.

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