5 events that should prompt a review of your estate plan in Pennsylvania
10/25/2016 | Articles & Alerts
According to a recent report from CBNC, more than half of the people in the United States will pass away without having a will in place. A will is one of the most basic components of estate planning, though many people in Pennsylvania fail to take the steps to put one together.
Even those who have a will, trust or other document in place may not realize how important it is too keep these items updated. Here are five times that people should revisit their end-of-life plans:
1. Marriage and divorce
One of the most common reasons people rethink their estate plans is because they get married or get divorced. For many people, a spouse is often the key beneficiary to insurance plans, or the spouse co-owns properties and accounts. As Consumer Reports points out, accounts that list beneficiaries will be distributed to those people regardless of what a will states. Therefore, not only does a trust or will need to be updated following a marriage or divorce, but all accounts should be as well.
2. Births and deaths
When someone significant passes away, one item to address after the mourning period is to update the estate plan to remove the name of that person. This may sound cold, but remembering to do so can eliminate heartache and confusion down the road.
The same goes for when there is a new life brought into the family, such as a child or grandchild. The new family member may need to be added in to inheritance.
3. New laws
There are state and federal laws that govern the way certain estate planning items are calculated. For example, as the Ohio Department of Taxation points out, there is no longer a state estate tax for people who pass away. There is still a federal estate tax, however, that could apply. Keeping an eye on these and other laws is key for people whose assets may be affected.
4. Changes to assets
It is quite possible that someone’s estate plan today could look drastically different even just five years from now, based solely on the property listed in the plan. Homes are purchased and sold, cars come and go. Someone may take up a new hobby collecting valuable art, or a certain stock account could greatly decrease in value. Anytime there is a significant change or an acquisition or a sale of key property, experts advise revisiting the plan.
5. The end of the year
Then end of the calendar year is a time for people to make resolutions and set goals. This is also a good time to review the estate plan to ensure no major changes are necessary. Setting an annual time to review or simply reviewing the plan every other year is a good reminder in case someone misses the chance to do so after a major life event.
By and large, an estate plan is typically only effective when it is accurate and up to date. Anyone with questions about this issue should speak to an estate planning attorney in Ohio.