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I have a Custom Estate Plan – When Does it Need to Be Updated?

I have a Custom Estate Plan – When Does it Need to Be Updated?

When To Update Your Estate Plan

Time is not much of a factor in deciding whether your planning needs to be updated. Other things might be an indication that a review or changes are need. Here are some things that would suggest a review would be advised:

Change in the law or taxes.

The exclusion amount for Federal Estate taxes (amount after which you owe taxes) was recently raised to approximately $12.06 Million per person. This means very few people need to worry about estate taxes. Not many years ago, that amount was below $1 Million. If your planning was done then, it would be a good idea to review that with an estate planning attorney. Your plan could probably be greatly simplified with more options to leave everything to a surviving spouse.


Some things are changed by law, such as any bequest in your Will to a now-divorced spouse are invalid in Alabama. However, some things do not change just because you are now divorced. For example, Life insurance, 401k, retirement, and pension beneficiaries may or may not be changed. It is vitally important to review documents and make the needed changes.


If you married since creating your plan, you need to make some changes. A pretermitted spouse (married after your Will was signed) can choose to ignore the Will. This would allow the spouse to take one-third or maybe one-half of your estate. While a spouse does often inherit by default, there are a lot of other considerations to make to an estate plan when a marital status changes. This is especially true in the case of subsequent marriages and blended family situations.

Death of a Spouse.

When one spouse passes away, the surviving spouse will need to update his or her estate plan to reflect that change. Not only will your beneficiaries likely change, but you may also have an inheritance from your spouse that now needs to be incorporated into your own estate plan. And, if you and your spouse used a joint trust as part of your estate plan, its instructions now need to be carried out correctly and promptly.

Beginning a Business.

A new business necessitates a visit with your estate planning attorney. Do you need a corporate entity? (probably). Should the business be owned by your trust? Do you have a succession plan in case of incompetency or death? Extra life insurance or a change of beneficiary on current life insurance might be needed to cover business expenses. A little legal planning at this time could save bit problems or expenses later.

Real Estate Purchase.

If you have a trust you need to be sure the real estate is properly titled to be in the trust. If it is a rental or investment property a corporate entity such as a corporation or LLC should be discussed. Real estate is often not easily divided and may need adjustment to the division of assets when you are gone.

Moving to a new State.

Most planning documents will be valid in any state. If there is any issue a good trust has a statement of situs that states that the document is to be interpreted under the laws of the state where it was created. Virtually all states recognize any Will if it would be valid in the state in which it was created. Some things vary such as the rules related to spousal minimum shares, omitted spouse, pretermitted spouse, executor bonds and inventory requirements. Power of attorney rules vary as to what powers must be explicitly stated. It is a good idea to at least have the document reviewed and discuss any changes or shortcoming of the document with any estate planning attorney in your new state.

You have a new Child.

A new child in the family is a blessing. Most good documents provide for this, but an even distribution might not be the best solution. If the added child was unexpected or several years between children. The youngest might need more resources if one or both parents are gone. It could change the person who would be custodian if both parents die early.

You have a new grandchild.

You may have included grandchildren in your planning, or you may not have had a grandchild at the time. You may want to leave money directly to or for the benefit of the grandchild. Any bequest to a grandchild needs the protection of a trust until the child reaches an age of maturity to successfully manage the money.

You changed your Mind.

Sometimes things happen or don’t happen that makes you rethink your gifts. A child could move across the county and become distant in more ways than the highway. Other things could become more important such as charitable giving, education for grandchildren or other family members. Even irrevocable trusts can be altered to match changing wants and needs.

Do I Need Estate Planning?

The State of Alabama provides an estate plan for everyone. It is a one size, and it fits everyone. Fits everyone? Not really.

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