For those of us that have taken the time to make an estate plan, we know how good completing that task makes us feel. It is like having insurance. Not only is it a sound financial decision, but also provides piece of mind for the inevitable. What many may not realize is that an estate plan is a living document that should be updated from time to time.
One of the many reasons to have an estate plan is to minimize our taxes later in life and the taxes of our heirs. However, the tax code is not static, and it is periodically updated. When these updates happen, like with the proposed Build Back Better Act, we should update our estate plans to make sure it still accomplishes the goal of tax minimization. If it still does, then a phone call for verification is fine. If not though, we may need to rework the plan, and if the new tax law made significant changes, we might need an entirely new estate plan.
Wills, assets and heirs
Our last will and testament is the backbone of an estate plan. It outlines who gets what and how much, but of course, those people, assets and allocations may change over time. After all, people pass, have children and our estate, hopefully, will grow over time. This means that, when life changes, our estate plan should similarly change.
For those of us with minor or disable kids, our estate plan will include guardianships that outline how we want our children cared for and who will care for our children. However, those wishes may change over time as our kids grow or our designated guardian passes or simply does not want to be so designated anymore. Parents should update this part of their estate plan as life changes.
As life in Lancaster, Pennsylvania, changes, so should our estate plans. This, of course, includes the law, but it also includes our heirs, assets, etc. The key is to ensure that at any point in our lives that our estate plan maximizes what we pass on.