It’s a good idea to update your California estate plan every few years or after the occurrence of significant life events such as marriage, divorce, the birth of a child and grandchild, or adoption.
Meet with your tax attorney while you’re still thinking about the changes you want to make to your plan.
Even if you haven’t experienced any of these events since you last updated your estate plan, there have been changes in California state and federal tax laws or changes in your financial situation that necessitate a reevaluation of your estate plan.
Your desires as far as how your property will be distributed are likely to change over the years, especially as certain events occur in your life. For example, if you get a divorce, you probably don’t want to make the same bequest to your former spouse as you did when you were married. In Los Angeles County, Ventura County, Santa Barbara County and Orange County, California, provisions regarding an ex-spouse in your will are not disregarded.
The birth or adoption of a child is another life event that will require you to update your estate plan. Even if your will or trust already provides for children, it is a good idea to update it each and every time you have a child.
Other significant events that will require you to update your estate plan are marriage, re-marriage, the death of a beneficiary, and the death of an executor or trustee.
California provides that a statutory share of the estate will go to a surviving spouse. If this statutory requirement is not in keeping with your estate planning desires, you will need to revise your estate plan or have a valid pre-nuptial or post-nuptial agreement to avoid it.
This becomes particularly important for individuals in a second marriage who have grown children from a first marriage. In this situation, you may want to provide for the support of your current spouse during his or her lifetime, but you will want to make sure that your children ultimately inherit your assets.
Without proper planning, your current spouse’s children could end up inheriting your assets, instead of your own children.
Another thing that tends to change over the years is your financial situation. If your current estate plan was made even a few years ago, your net worth may have changed enough that you will need to incorporate more estate tax planning into your estate plan.
Finally, you should reevaluate your desires from time to time. You may find that you’ve changed your mind about a variety of issues addressed by your estate plan. Do you want a different person to be the trustee of your estate, rather than the one who is currently named in your will or trust? Did you grant a health care power of attorney to one of your children and now that child has moved to a different state? Is there something about the way one of your beneficiaries is leading his or her life that would make you want to put their bequest into a trust rather than granting an outright distribution?
You may have become aware that one of your children has trouble managing money and you fear their creditors might end up with the inheritance.
If you already have an estate plan in place, you deserve congratulations for planning ahead and being prepared. But you also need to remember to update it from time to time as your situation or needs change.
To discuss this in more detail, please call Mitchell A. Port at (310) 559-5259.