Should You Review Your Estate Plan?

It may surprise you to know that estate planning is not one and done.  Because life, the law, including tax laws and estate planning techniques change, your estate plan may need to change as well to address these changes.  If your estate plan is stale, it may not work.  When an estate plan doesn’t work, it doesn’t do what you want it to do.

Legally Valid, but Not Honored

A stale estate planning documents is likely still legally valid; however,  loved ones may have difficulty having them honored or they may not carry out one’s current intent.

For example, power of attorney documents, especially financial power of attorneys, may not be honored if they are more than a few of years old.  Financial institutions are sometimes concerned that the document may not still be valid so for fear of giving money to someone who is not authorized, they may refuse to honor the document.  In California, a financial institution may legally refuse to honor a power of attorney if it has reason to question it.

One remedy is to sue the financial institution to force it to honor the document, but that’s a hassle and costly in terms of money and time and it may not be successful. In California, a financial institution may legally refuse to honor a power of attorney if it has a legitimate reason to question it.  It’s sometimes easier and more efficient just to have your documents updated.

Your Current Intent

As life unfolds, your family, personal situation, financial situation, and goals may change.  Your estate plan will only work as you intend if it reflects these changes.

For example, if you have gotten divorced, you may not want your ex-spouse to be named in a trusted helper (i.e. trustee, executor, and power of attorney agent) or as a beneficiary in your estate plan, including your life insurance and retirement accounts.

The Current Law

The law is in constant flux and when laws affecting estate planning change, a plan needs to change along with them.  You likely see talk on the news about the federal estate tax, but there are many law changes that don’t make the news.  Only regular estate plan reviews will catch these changes.

If you haven’t had an estate plan review in the last 3 years, consult with an experienced and qualified estate planning attorney.

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Timothy P. Murphy

Timothy P. Murphy is an estate planning and elder law attorney whose practice emphasizes helping people to build, preserve and pass on their wealth. He works with his clients to accomplish their goals while avoiding unnecessary court proceedings and minimizing or eliminating exposure to death taxes.

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