Clients often ask me when they should review and update their estate plan. I recommend the estate plan should be reviewed every 5 years at minimum, but more often if there are significant life changes.
Here is a checklist of events that may trigger an update to your estate plan:
- Birth of a child. Most estate plans include after-born and adopted children but parents usually want to name their children specifically and provide for a trust for minor children.
- Death of a child or a beneficiary. If a child predeceases you, do you want their share to go to their spouse or to your grandchildren? If your named beneficiary predeceases you, what do you want to do with their share? Does it lapse and go back into the “residue” to be divided among your other beneficiaries?
- Marriage. Marriage revokes a will unless the will specifically states that it is made in contemplation of the marriage. Do you want to take care of the children from your first marriage as well as a new spouse?
- Divorce. Divorce revokes the beneficiary designations in favor of the ex-spouse. So who gets your assets now?
- Change of Trustees or Personal Representative. Perhaps the person you named in your trust or will years ago is too old or too sick to manage your estate or has moved out of state. Do you have alternates named in your will or trust?
- Recent retirement. Your 401(k) or IRA often holds most of your assets. Make sure your beneficiary designations are properly made so your estate plan is carried out.
- Large inheritance. Oregon taxes estates over $1 million, including retirement plans and life insurance. If your estate is properly planned, a married couple can pass a $2 million estate tax-free to your beneficiaries.
- Gifting. Many people think that gifts are limited to $15,000 a year per person. With the new increased federal gift/estate tax exemption, you can gift a lot more to your children and pay no gift tax. However, you must file a gift tax return so the IRS can track the gifts you make.
- Relocation. The laws vary from state to state and your out of state will or trust will probably need to be updated so that Oregon law applies if you’ve moved into Oregon. Also, Oregon’s advance directive forms are different from those in other states.
- Leave a Legacy. Once your family is taken care of, many people want to leave assets to their favorite charity in their will or trust. Others will involve their family by making gifts to a charity using a donor advised fund. This requires planning to make sure your goals are achieved.
Procrastination looms large in estate planning. While you may feel confident you have an estate plan in place, life changes frequently happen. And tax codes will change. It is essential to review and update your will or trust so that your wishes are carried out in a timely and tax efficient manner.
If you have estate planning questions and need legal assistance, please contact Mr. Le Chevallier at 503-620-8900 or visit our website at www.buckley-law.com.
Rob Le Chevallier
Rob Le Chevallier practices business law, business formation, estate planning, trust administration, real estate law, and corporate financing at Buckley Law P.C. He particularly focuses on the estate planning needs of business owners and other high net-worth individuals and their families. He is an attorney and shareholder at Buckley Law and is licensed in Oregon and Washington.
The information contained in this article is for informational purposes only and does not constitute legal advice. This information is not intended to create an attorney-client relationship, and the receipt or viewing of it does not create or constitute an attorney-client relationship. You should not act upon any information contained in this article without consulting an attorney for individual advice regarding your own situation.