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Life is always in flux: When to amend your estate plan

When did you last revisit your estate plan? Never? Years ago? There are at least two reasons why you might want to think about taking a new look at your documents: your life may have changed significantly, and new tax or trust laws could have affected your estate plan without you even realizing it.

Events that should prompt you to amend your documents obviously include a change in your marital status, the arrival of a baby or the adoption of a child, as well as significant changes in the lives of all those who feature prominently in your estate plan.┬áIf your spouse, your child, a trustee, your health care proxy or your child’s appointed guardian dies or becomes incapacitated you will need to rethink your last will or appoint new key players. If you start a new business or buy or sell a company you will have to restructure your plan to reflect the change. If your net worth changes because you inherit a fortune you will want to use your estate plan to minimize taxes. An amendment might also be necessary if you purchase or sell real estate or another large asset.

One of the prime reasons to revisit your estate plan would be a move to a different state. The tax laws and the laws for setting up a plan vary from state to state. Documents that might not be necessary in one jurisdiction can be required in another. When you move, your estate plan, or parts of it, could become invalid if you don’t supply them.

As for the changes in law I mentioned in the beginning, I suggest you check with your attorney every three to five years to make sure you are not affected by new legislative measures.

The thing to remember with estate plans? They are generally not set in stone. Exceptions apply, but for the most part you are free to amend or revoke your will and your living trust as you wish and see fit. And you should make changes. Because life is always in flux.

by Kevin J. Moore