With the new year arriving, you may have a list of things you hope to accomplish. One thing that should be on the list is reviewing and updating your estate plan.
Having an up-to-date estate plan ensures that these legal documents are consistent with your wishes and your family situation. Remember that any major life changes such as a remarriage, birth of a child or out-of-state move necessitates that you update your estate plan. Keeping things current also will help you avoid any potential lawsuits.
The right attorney and right fiduciary
A proactive approach to estate planning represents a critical safeguard that may prevent your estate and its assets from being squandered via a family conflict.
Here are some matters to consider when updating your estate plan:
- Work with an experienced and skilled estate planning attorney: This is essential. An attorney will answer your questions, explain the process and any new laws put in place and provide important insight. You are in good hands with the right attorney.
- Make sure you have the right person in the fiduciary role: This is the executor for a will and a trustee for a trust. This person must be trustworthy, organized, financially savvy, assertive and have the availability. The wrong executor may cause conflict with your beneficiaries by neglecting these important duties and even stealing money. Remember that an outdated estate plan may include a fiduciary who is no longer fit, capable or willing to perform these duties.
- Children-related matters: A few things come to mind. If you have concerns about your adult child blowing his or her inheritance, consider a spendthrift trust. And what if your adult child has married? That inheritance may become commingled with the spouse’s assets. The potential result: The inheritance may be subject to equitable distribution if a divorce happens. Also, what if the fortunes of your children led to divergent paths? One is a successful professionally and financially, while the other may be homeless, unemployed or with any number of serious life challenges. Tactfully address these issues.
An outdated estate plan may no longer be consistent with your wishes. That is why it is crucial to keep your estate plan up to date.
Review and update your estate plan
Your strategy should be creating an effective estate plan that may help avoid any chance of litigation. A crucial thing to remember is to review your estate plan every three to five years. An outdated estate plan may lead to headaches and even lawsuits.