Is Your Will or Trust Up-to-Date?

Recent changes may have caused a need to review

When was the last time you or your attorney reviewed or updated your will or trust? If it was before the passage of the 2017 tax reform legislation, or the Tax Cuts and Jobs Act (TCJA), your documents may be out of date. Among the many changes in that law was a more than doubling of the estate tax exemption. Prior to the TCJA, if the value of an individual’s estate at his or her death was about $5.5 million or more, it was subject to the estate tax. For deaths in 2020, and based on the TCJA inflation-adjusted amounts, just over $11.5 million is exempted from estate tax. So, if your will or trust was premised on the lower value, it may need to be revised so that it provides the appropriate estate tax results for your situation.

No doubt your will or trust was prepared with not just estate taxes in mind but so that your assets will be distributed after your death according to your wishes. However, certain events besides the tax laws being revised can cause these documents to become outdated.

Life’s ever-changing circumstances make estate planning an ongoing process. If you don’t keep your will or trust up to date, your money and assets could end up in the wrong hands. That’s why a periodic review of your will or trust is an essential part of estate planning. Here is a partial list of occurrences that could cause your will or trust to be outdated:

• Your marital status has changed.
• Your heirs’ marital status has changed.
• You have relocated to another state.
• You’ve had or adopted children.
• Your children are no longer minors.
• Your children are now mature enough to handle their own financial matters.
• Your assets have significantly changed in value.
• You have sold or acquired a major asset(s).
• Your personal representative (executor, trustee) has changed.
• You wish to delete or add heirs.
• Your health status has changed.
• Estate laws have changed.

Are your named beneficiaries up to date on your life insurance policies, IRA accounts, and pension plans? For example, did you forget to remove your ex-spouse or a deceased relative as your beneficiary?

You should never overlook or put off these issues because once you pass on, it will be too late to make changes.

If you have questions about how your changed circumstances may impact your estate taxes, please give this office a call.