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Written by: Erin Calpin, Esq.
There are always changes in your life that can happen in a moment or over a period of time. Some of these changes may be happy ones while many others may be harder to grapple with. In many cases, these life changes also require that your estate plan be updated. Estate planning is the process of creating an estate plan for the distribution of your assets and wealth after your death. An estate plan typically involves several legal documents that outline your wishes for how your assets will be distributed and managed, and who will be responsible for carrying out those wishes.
The primary goal of estate planning with an experienced New Jersey estate planning lawyer is to ensure that your assets are distributed according to your wishes, and that your loved ones are taken care of after your death. A well-crafted estate plan can also help minimize taxes, protect assets from creditors, and provide for loved ones in the event of incapacity or disability.
What Types of Changes in Circumstances Would Call for an Update in Your Estate Plan?
There are several changes in circumstances that could require an update to your estate plan. Some of the most common ones include:
1. Changes in family circumstances: Births, deaths, marriages, divorces, or estrangements can all have a significant impact on your estate plan. If you have a new child or grandchild, for example, you may want to revise your plan to include them as beneficiaries. Similarly, if a beneficiary passes away or you go through a divorce, you may want to update your plan to reflect these changes.
2. Changes in financial circumstances: Significant changes in your financial situation, such as the sale of a business or a sudden increase in wealth, may also require updates to your estate plan. You may want to consider setting up trusts or making changes to your will to reflect your new financial circumstances.
3. Changes in tax laws: Tax laws can change frequently, and these changes may impact your estate plan. It's a good idea to review your plan regularly with an estate planning attorney to ensure that it reflects the most current tax laws and regulations.
4. Changes in health or capacity: If you experience a decline in health or capacity, it may be necessary to update your estate plan to ensure that your wishes are carried out in the event of incapacity or death. This may include setting up a power of attorney or living trust to manage your affairs and make medical decisions on your behalf.
5. Changes in your goals or preferences: Your goals or preferences may change over time, and your estate plan should reflect these changes. For example, if you have a change of heart about a beneficiary or want to leave a larger gift to a charity, you may need to update your plan to reflect these new preferences.
What Steps Can You Take to Ensure That Your Estate Plan is Up to Date?
1. There are several steps that you can take to ensure that your estate plan still meets the goals that you have for your assets once you pass away. A few examples of steps that you can take to ensure that your estate is in order include:
Review and update your estate plan regularly: It's important to review your estate plan at least once a year or whenever there is a major change in your life circumstances, such as a marriage, divorce, birth of a child or grandchild, or a significant change in your financial situation. This will help ensure your estate plan remains up-to-date and reflects your current wishes and circumstances.
2. Name alternate beneficiaries: In your estate plan, make sure you name alternate beneficiaries in case your primary beneficiaries pass away before you do. This will help avoid complications and ensure that your assets are distributed according to your wishes.
3. Consider setting up trusts: Trusts can be a valuable tool in estate planning for managing assets and providing for beneficiaries. Depending on your circumstances, a trust can help you protect your assets, minimize taxes, and provide for loved ones in the event of your death or incapacity.
4. Plan for incapacity: In addition to planning for your death, it's important to consider the possibility of incapacity. You can do this by creating a power of attorney or a living trust, which will allow someone you trust to manage your financial affairs and make medical decisions on your behalf if you become incapacitated.
5. Work with an experienced estate planning attorney: Estate planning can be complex, and the laws and regulations governing it can change frequently. Working with an experienced estate planning attorney can help you create a comprehensive plan that takes into account your unique circumstances and can be updated as needed.
When you reach out to the experienced estate planning attorneys at Borenstein, McConnell and Calpin, you can take comfort in the fact that we will work with you to develop or update an estate plan based on your situational needs. Get in touch with us today to learn more!