Posted by: The Life and Legacy Planning Group
Whether or not you currently have estate planning documents, one important item to add to your calendar is getting an estate plan checkup.
Don’t Have an Estate Plan?
If you don’t already have an estate plan, then getting one in place should be at the top of your to-do list.
Why? Because without an estate plan, you and your property may end up in a court-supervised guardianship if you become incapacitated, and your property and your loved ones may end up in a time-consuming and expensive probate proceedings after you die.
Worse yet, if you don’t take the time to have any estate planning done, then the state where you live at the time of your death will essentially write one for you. It most likely won’t divvy up your property the way you would like and certainly will not protect your heirs the way you would.
A common misconception is that estate planning is only necessary for wealthy people. But this simply isn’t true – if you have a bank or retirement account, a home, or a family, you need to make a plan for what happens if you become incapacitated or when you die. Of course, the complexity of the plan will vary depending on your circumstances, but all estate plans should be put together with the help of an attorney who is experienced with the legal formalities required to create a valid Will, Living Trust, Power of Attorney for Property, Power of Attorney for Health Care and other advance medical directives.
How Old Is Your Estate Plan?
Do you already have an estate plan?
If you do, then please pull your documents out of the drawer, dust them off, and look at the date you signed them.
Were your documents signed in the 80s or 90s, or, worse yet, before 1980? If so, please run, don’t walk, to an estate planning attorney, because your documents are terribly out of date and need to be updated as soon as possible.
Did you sign your documents between 2000 and 2009? Aside from the federal estate tax exemption jumping from $675,000 to $3,500,000 during that time period, the state of Illinois also changed its estate tax, and it has little relationship to the federal estate tax. Because of the significant changes in federal and state estate taxes, documents from this time period are out of date and probably need to be tweaked in some shape or form.
Did you sign your documents between 2010 and 2017? Federal estate taxes, gift taxes, and generation-skipping transfer taxes went through major changes during these years, and “portability” of the federal estate tax exemption between married couples was introduced. Unfortunately, while your estate planning documents may only be a few years old, they very likely do not take advantage of the opportunities made available from recent changes in federal tax laws. And, it’s not just tax laws that are changing – modifications to state laws governing Wills and Living Trusts warrant some revisions to your estate planning documents as well. In addition, the state of Illinois has amended its Power of Attorney Act on 3 separate occasions over the past bunch of years. Add to that the fact that many financial institutions are reluctant to accept Powers of Attorney that are, in their minds, “stale” or simply “too old,” an update is absolutely warranted if your documents are more than 3 to 5 years old.
And last but not least, regardless of what year you signed your estate planning documents, think about all of the changes in your life since you signed them. Did you get married or divorced, have a child or a grandchild, or move to a new state? Did you sell your business, retire, have a significant change in assets, or win the lottery? Any major changes in your family or financial situation will certainly have an effect on your estate plan.
Estate Planning Is Not a One Shot Deal
Estate planning is not a static event that you can grudgingly do once and then forget about it, like checking off a bucket list item. On the contrary, estate planning is a continuing process, because life is a moving target that is full of constant change. Your estate plan needs to change as your life changes.
We are here to help you navigate the changes that have occurred since you had your estate plan prepared and ensure that your wishes are still being carried out as you envisioned. For those needing an estate plan, we are here now and in the future to mold your estate plan as you move through the various stages of life.