The occurrence of a major life event, is a good time to assess whether your trust, will and estate plan needs to be updated. The estate planning attorneys from San Luis Obispo’s Toews Law Group, Inc. have prepared a list of important life events that might mean it’s time to update the terms of your trust and will.
Basically, any significant change in the “Who, What, Where, When, and Why” of your life may mean that it’s time to review your estate plan documents. Key events can include:
- Who: Changes in your family structure, close friends, or marriage;
- What: Changes to your net worth, acquisition or sale of significant assets, or the sale or acquisition of a business interest
- Where: Changes to your residence, your job, or where fiduciaries are living
- Why: Changes in your charitable intent, restrictions on distributions, or specific gifts
- When: lifetime gifts, age at which you would like beneficiaries to receive assets, creation or termination of life estates
There are a variety of other life events which indicate that it’s time to review and potentially update your will and trust, including forming or selling a business, purchasing a rental property, receiving inheritance, the birth or death of a family member, and moving out of state.
The following tips can be helpful guidelines. The guidance of an experienced estate planning attorney from San Luis Obispo’s Toews Law Group, Inc. is the best way to ensure your estate documents are updated accurately and in a timely fashion.
Who: Changes in the family
The following changes in your family may prompt an update to your estate plan: Marriage, divorce, the birth of a new child (or grandchild), death of a spouse, child, or close friend; When an adult child marries or has children are other reasons to review trusts and wills, as well as when a married child gets a divorce.
A child graduating college, buying a home, or reaching the age of 25 can also prompt a parent to place a child in a fiduciary role – such as naming them as Successor Trustee or your agent.
The death of a parent or other family member may also impact your estate plan. Often times, children or siblings of deceased family members are named as beneficiaries of the decedents estate. The receipt of inheritance creates a number of scenarios in which a revision or amendment of the estate plan is advisable.
What: Changes in net worth, acquisition or sale of assets or buying/selling a business
Any change that significantly affects the value of your estate may prompt an update to your estate plan. Examples including a change in salary, receipt of inheritance, or the sale of your business.
Trusts can act as a tool to designate business succession when if you own your business. It’s also important to protect yourself and your business partners with Shareholder’s Agreements or Buy-Sell provisions that work with the terms of your estate plan. These documents can identify what will occur if you should become incapacitated or die unexpectedly, specifying who inherits your share of the business, or confirming the sale of your share to the remaining partners.
Where
Moving out of state likely requires a review of your estate plan to determine if there are significant changes. While a Living Trusts is valid so long as you stay a resident of the United States, other documents tend to vary state-to-state. Most importantly, most states have their own documents which designate agents for business and health care.
Likewise, acquisition of assets outside of the US can create significant estate planning issues that may require attention.
Why
An estate plan is designed to ensure that the assets you built during your lifetime continue to benefit the individuals and/or charities after you’re gone. Changes to your charitable intent -such as adding (or removing) a charitable beneficiary, or providing specific instructions regarding how funds should be used – will necessitate an update to your Estate Plan.
When
Absent any major life event, it’s advisable to revisit your Estate Plan documents every 4-5 years. Generally, a trust and will should be reviewed every five years, but it’s a rare life that is uneventful for that long. When in doubt about whether your will or trust needs to be reviewed, the estate planning attorneys from San Luis Obispo’s Toews Law Group, Inc. are able to assist.
A consultation with you is going to answer your questions as well as possibly bring unthought of needed changes to your attention. A review of the will and trust is also going to make sure that changes are made correctly and accurately, preventing possible future problems.
Call today for a free consultation.
This information has been prepared by Toews Law Group, Inc. for informational purposes only and is not legal advice. The transmission of this information is not intended to create an attorney-client relationship. Contacting us does not create an attorney-client relationship. Consult an attorney for advice regarding your individual situation.
