It’s important to consider estate planning an ongoing process instead of a one-time task. It would be best if you kept making changes to your plan as things change in your life. It is important to review your plan every five years. Some life events should make you take a closer look at your estate plan.
Updating your estate plan can help ensure that your assets are distributed as you want them and that your loved ones are taken care of after you die. It is important to review and update your estate plan regularly. You can seek the assistance of an experienced Long Island estate planning attorney to help you with any questions in regard to your estate plan. These concerns or questions can include advice on how to avoid paying estate taxes and the consequences of not having a will on Long Island. Call Schlessel Law, PLLC, at (516) 574-9630 to set up a free consultation.
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. But you will have to take special 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, like 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 now. 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. But it’s still a good idea to make sure your estate plan reflects today’s reality.
Retirement
Ideally, retirement planning was part of your estate planning, but you should still sit down with your attorney when you’re ready to pull the trigger. This will help ensure that the entire process goes smoothly.
This is also a good time to add or remove beneficiaries, and to ensure the beneficiaries of certain estate planning vehicles, like annuities, are up to date.
Moving
Any time you move to a new state you need to update your estate plan. This is to ensure that your plan is in line with state laws and to ensure that it will be executed appropriately.
Digital Assets
Digital assets are an essential part of our lives. Digital assets include social media accounts, photos, videos, and other online properties. It is important to add conditions to your estate plan that account for your digital assets. 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 help ensure that your heirs can inherit and manage these digital assets.
The laws governing digital assets are changing quickly. Therefore, it is important to speak with a lawyer to create a legally valid and up-to-date estate plan. Working with an attorney is important in order to stay informed of new laws and help ensure that your estate plan accurately reflects your 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. |
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 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 Surrogate’s Court. Furthermore, a will exposes you to the potential of a will contest, wherein a part 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 ensuring peace of mind and proper security. At Schlessel Law, PLLC, our attorneys can thoroughly review your estate documents, ensuring 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 You Can Do With an Effective Estate Plan
The main goal of having a comprehensive estate plan in New York is to protect families and their assets. It is important to start planning the future in order to make sure that your assets are distributed according to your wishes and that your loved ones are protected even after unexpected events happen.
A comprehensive estate plan involves creating a Will or a Trust. These two are some of the most important estate planning tools that will help you establish who will inherit your assets and when that person should receive the assets. Having a Will or a Trust in place will 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 be expensive, draining your estate and causing financial ruin to your loved ones.
Federal and state estate taxes may also greatly impact the value of your assets that 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 allows 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.
Get Help Today
These life events aren’t the only ones that should prompt you to change your estate plan. There are others. It’s easy to forget estate planning, which is why we recommend a 5-year check-up…this can help ensure you catch changes you might have forgotten to make at the appropriate time.
Need help updating your estate plan? Haven’t built one yet? Contact our law offices to get help today.
