Rather than a one-time event, estate planning is an ongoing process that should evolve as your life changes. Regular reviews and updates are crucial to reflect your current wishes and allow your assets to be distributed as you intend.
For most people, understanding when and how to update their estate plan can be daunting. Nonetheless, it plays a crucial role in maintaining legal compliance and peace of mind. Whether it’s a change in marital status, the addition or loss of a family member, or significant changes in your financial situation, all can signal the need for an estate plan review.
If you’re unsure about the current state of your estate plan or if it’s been a while since your last review, Schlessel Law PLLC can help. Our experienced Long Island estate planning attorneys can guide clients through the estate planning process with clarity and professionalism. We can address any questions or concerns regarding your estate plan. These can include advice on how to avoid paying estate taxes and clarifying the consequences of not having a will on Long Island. Contact us today at (516) 574-9630 to schedule a consultation and learn more about how we can assist you in making the necessary adjustments to secure your legacy and protect your loved ones.
Here is a list of other factors that could lead you to consider revisiting and updating your estate plan.
Having a Child
Having a child or adopting a child has two implications. First, you’re adding a new potential beneficiary to your estate plan. Second, for the first eighteen years of that child’s life, they will need you to make plans for their care and guardianship if something happens to you.
If you have stepchildren, you need to consider whether and how you will provide for them in your estate plan as well.
Changing Your Marital Status
Getting married and getting divorced both create massive changes to the way that you may want to handle your estate in the future. You’ll need to remove your ex and add your new spouse.
If you have an unmarried partner you wish to see cared for, then you can include them in your estate plan, even if you never get legally married. However, you will have to take specific steps to make it happen.
Major Financial Changes
Have you started a business that took off? Did you experience a major windfall? Did you purchase a house or buy a second property? Have you created a piece of intellectual property, such as a software program or a creative work, that is now generating an income?
Adding any complexity to your financial situation should prompt you to sit down with an estate planning attorney.
Health Issues
If you get diagnosed with a terminal illness or an illness where the prognosis is poor, it’s time to update your estate plan right away. You need to know that both your death plan and your long-term care plan are firmly fixed in place.
Obviously, you hope to get better, and we, your attorneys, hope you get better as well. Nonetheless, it’s still a good idea to make sure your estate plan reflects today’s reality.
Retirement
Ideally, retirement planning was included in your estate planning. However, before moving forward, it’s important to meet with your attorney to help make the process as smooth as possible.
Also, this is a good time to add or remove beneficiaries and to confirm that those listed for certain estate planning vehicles, such as annuities, are up to date.
Moving
Any time you move to a new state you need to update your estate plan. This helps keep your plan aligned with state laws and supports its proper execution.
Digital Assets
Digital assets are an essential part of our lives. Digital assets include social media accounts, photos, videos, and other online properties. Adding conditions to your estate plan that account for your digital assets is crucial, as not doing so may cause your heirs to be unable to access your digital assets after you pass away. Reviewing your estate plan and confirming that it covers your digital assets can enable your heirs to inherit and manage these digital assets.
Moreover, the laws governing digital assets can change drastically, emphasizing the importance of speaking with a lawyer to create a legally valid and up-to-date estate plan. Working with an attorney can enable individuals to stay informed of new laws and help ensure that their estate plan accurately reflects their wishes.
| Factors for Revisiting and Updating Your Estate Plan | Key Considerations |
|---|---|
| Having a Child | Add a new beneficiary and plan for child’s care and guardianship in case of your absence. Consider stepchildren and their inclusion. |
| Changing Your Marital Status | Adjust estate plan for marriage or divorce, removing/ex-spouse and adding new spouse/partner. |
| Major Financial Changes | Evaluate and modify estate plan after significant financial changes, like starting a business, windfall, property purchase, or intellectual property creation. |
| Health Issues | Update estate plan with terminal illness diagnosis to ensure proper death and long-term care plans are in place. |
| Retirement | Coordinate retirement planning with estate plan for a smooth transition and alignment of objectives. |
| Moving | When relocating to a new state, update estate plan to align with state laws and ensure appropriate execution. |
| Digital Assets | Include provisions for digital assets in your estate plan to enable access and management by heirs after your passing. |
How Changes in Estate Laws Can Affect Your Plan
When estate laws shift, the implications for your estate plan can be substantial. Legislative changes may affect various components of estate planning, including tax obligations and asset distribution strategies.
Federal and state tax laws are particularly significant in this regard. Alterations in estate and gift tax exemptions, for example, can greatly influence how much of your estate can be passed on tax-free to your beneficiaries. If exemptions decrease, your heirs might face higher taxes on their inheritances. Conversely, if exemptions increase, new opportunities can arise to transfer more wealth without incurring tax.
Moreover, changes in tax rates and the introduction of new rules governing wealth transfer can necessitate a re-evaluation of your estate plan. Strategies such as lifetime gifting and the creation of trusts may need to be adjusted to align with the updated legal framework.
Additionally, state-specific laws must be considered, as they can vary widely and have direct impacts on your estate’s tax liabilities. For residents of Long Island, being up-to-date on the estate taxes in New York state is particularly important.
Given the potential for law changes to disrupt even the most carefully structured estate plans, regular reviews are advised. Consulting with an attorney well-versed in New York estate laws is recommended to help maintain an effective and compliant plan. At Schlessel Law PLLC, our Long Island estate planning attorneys can provide valuable guidance on adapting your estate plan in light of recent or anticipated legal changes.
How Often Should You Update Your Will?
Update your will every three to five years or after major life events, such as marriage, divorce, childbirth, or significant financial changes. Regular updates ensure your will reflects your current wishes and legal circumstances. Consulting an estate attorney can help keep your will legally valid and aligned with your intentions.
In detail, updating your will is a crucial part of ensuring your wishes are honored. Life changes can affect how your assets are distributed, so it’s essential to review your will regularly. Consider updating your will after any significant life event, such as marriage, divorce, the birth or adoption of a child, or the death of a beneficiary. These events can dramatically alter your intentions and require adjustments to your estate planning.
If you acquire or sell substantial assets, such as property or investments, you should revise your will to reflect these changes. This allows your assets to be distributed according to your current wishes. Be aware of any changes in laws that might impact your estate. Tax laws and inheritance regulations can change, potentially affecting your estate planning. Consulting with a legal professional can help you stay informed and compliant.
Even without significant changes, it’s wise to review your will every three to five years. This helps ensure that everything is up-to-date and reflects your current situation and intentions. If an executor becomes unable to serve or if your relationship with a beneficiary changes, update your will accordingly to maintain clarity and reduce the potential for disputes.
Trust and Will Reviews
Wills and trusts share certain similarities. For instance, both enable the transfer of property to loved ones after your passing, and both can be altered or revoked during your lifetime. However, the primary distinction lies in how property is conveyed to beneficiaries.
A trust serves as a financial mechanism and fiduciary arrangement in which a third party (referred to as the trustee) manages and holds assets on behalf of a beneficiary. It proves effective in sidestepping probate. An essential differentiation among various types of trusts is whether they are revocable or irrevocable.
- Revocable trust: Referred to as a living trust, this legal arrangement empowers the grantor to retain control over their assets during their lifetime. Since control over assets is retained, estate taxes still apply, and the assets are treated as part of your personal property.
- Irrevocable trust: Involves the transfer of assets out of your estate, typically resulting in exemption from estate taxes. As the name implies, this type of trust cannot be altered, and control over the property is relinquished.
On the other hand, a will is a legally binding document that outlines the allocation of a deceased individual’s assets and possessions after their death. The will designates an executor, responsible for managing estate expenses, facilitating property distribution to rightful heirs, and handling property and financial matters related to the estate, among other duties. Additionally, a will can designate a guardian for minor children and dependents.
Validation of a will involves a process called probate, which occurs in the Surrogate’s Court. Furthermore, a will exposes you to the potential of a will contest, wherein a party who has standing in the will’s contents can challenge the will’s validity. To avoid probate, it is recommended to create a trust.
When considering the protection of your assets and the future well-being of your loved ones, seeking the assistance of a Long Island estate planning attorney becomes a crucial step in helping ensure peace of mind and proper security. At Schlessel Law PLLC, our attorneys can thoroughly review your estate documents, maintaining compliance with current legal requirements and alignment with your specific situation. Schedule a consultation with us today and take the first step towards safeguarding the future of your beloved family members.
What Can You Do With an Effective Estate Plan?
An effective estate plan allows you to distribute assets, minimize taxes, name guardians for minors, assign healthcare proxies, and avoid probate. It ensures your wishes are legally protected and reduces disputes among beneficiaries. Your plan should be reviewed every 3–5 years or after major life events for continued accuracy.
A comprehensive estate plan involves creating a Will or a Trust. These two are some of the most important estate planning tools that help establish who will inherit your assets and when that person should receive the assets. Having a Will or a Trust in place can allow you to give assets to certain heirs once you pass away or become incapacitated. A Trust can also let you choose to give your beneficiaries assets when they reach a specific age or choose to support them for the rest of their lives. An estate plan can also support a child with special needs.
If you have a well-prepared estate plan, your family may be able to avoid Will contests or costly court battles. These court battles can drain your estate and cause financial strain on your loved ones.
Federal and state estate taxes may also greatly impact the value of your assets, which are eventually passed on to your heirs. A good estate plan can reduce or even eliminate estate taxes altogether.
Furthermore, having an Asset Protection Trust enables you to protect assets ahead of any long-term medical needs. This allows your hard-earned money to be passed to your loved ones without any risk of spending it.
Lastly, the Power of Attorney and Health Care Proxy, also known collectively as Advance Directives (or simply “Plan of Incapacity”) can be an integral part of your estate plan. These directives allow you to prepare ahead for the eventuality of your incapacity. You can make arrangements ahead of time and name trusted advisors to help you.
Updating Your New York Estate Plan with the Help of Schlessel Law PLLC
Reviewing and updating your estate plan is a crucial step in safeguarding your future and that of your loved ones. As life changes, so should your estate plan to reflect new circumstances.
At Schlessel Law PLLC, our skilled Long Island estate planning attorneys are here to assist you in updating your estate plan with precision and care. We understand the importance of adapting your estate documents to reflect your present situation and future aspirations. Whether it’s revising wills, addressing relevant concerns, or adjusting your plan to accommodate changes in law, our team can provide thorough and thoughtful guidance. Contact us today at (516) 574-9630 to schedule a consultation and discuss how we can assist in refining your estate plan.
