Stress Test Your Estate Plan
Congratulations, you have successfully set up an estate plan. But this is just the beginning. You have more crucial work to be done in order to guarantee that your chosen approach will safeguard your inheritance and bring you complete tranquility. You need to stress test your estate plan. After all, peace equals less stress. And who wants stress? Not me!
Your Estate Plan Is a Living Creation
Estate plans should be like living, breathing creations that reflect the changes in your life. An effective estate plan is an ongoing process. Your life can, and will, change. Your plan should adjust to your continuously evolving lifestyle.
Life Changes
Is your family growing? Are you watching your children mature? Or, are you experiencing other family-related changes? If so, your estate plan should keep up with your changing situation. Your plan needs to adapt to changes in your investment portfolio, business or job, health, values and where you reside.
Similarly, unexpected circumstances like a change in tax laws or the emergence of a pioneering financial tool can disrupt your strategy or present fresh avenues for growth.
You Need To Stress Test Your Estate Plan
Your life is ever changing. Therefore, so should your estate plan. Life changes can create stress. Stress can affect your estate plan. Worrying about whether your estate plan still works for you can cause stress.
So let me help you with your stress. To decide whether you need to consult with an estate planning lawyer, do a stress test of your current plan. As yourself the following stress test queries:
When Was The Last Time You Updated Your Estate Plan?
Have you experienced any major life changes, such as divorce, having children or moving to a new state? It's advisable to review and revise your documents to reflect any changes in your circumstances or wishes for your legacy. Don't delay updating your documents if something significant has happened in your life.
Also keep in mind that there may have been changes in the law since your last update that could significantly affect the viability of your plan.
2.Who Did You Name As Your Executor or Trustee?
If you had to start your planning over from scratch today, would you still name the same people? If not, why not? Did you choose the best person for the job or was your choice based on less relevant factors? Is the person you chose still available to serve in that role?
3. Do You Have Sufficient Insurance?
Many people do not have enough insurance for themselves or their businesses. They also fail to name contingent beneficiaries. Get your insurance policies in order, and make sure your designations match your estate plan.
4. How Is Your Property Owned?
Do you co-own any property with someone other than your spouse? This type of ownership can lead to double taxation. It's crucial that you analyze your real estate holdings and consult with tax experts on how to tweak them for maximum tax savings in applicable situations.
5. How’s Your Record Keeping?
Every executor's worst nightmare is bad record keeping. You wouldn't want to frustrate the executor, right? So ask yourself, if you died today, would your executor be able to find your important records? Or, would your Executor have to hunt and search to find where your assets are located?
6. When Was The Last Time You Reviewed Your Estate Plan?
Did you have a major life change since your initial plan was created? Even if the answer is no, you still should review your plan at least every five (5) years. It’s a good idea to consult with an estate planning lawyer every five years to review your plan, talk about changes, Identify any issues, and iron out the kinks one at a time.
Questions?
After going through the “stress test,” if you have any questions, please feel free to give us a call. Estate planning is an ongoing process, and we want to make sure your wishes withstand the test of time.
