April 22, 2013

Baby Boomers - update your estate planning documents!

I have found that many clients have their wills drafted when they have young children at home, and then do not think about revisiting their documents ever again. As a rule of thumb, I recommend that my clients review their estate planning documents at least every three years. If you haven't looked at your documents in a while (or even in a few decades!), here are a few reasons why doing so is a good idea:
  1. Laws change. State and federal laws regarding estate taxes are always in flux. Also, some states have adopted new laws about "living wills" - the documents that guide your family in making end of life decisions about your care.
  2. People change. Twenty years ago, you may have appointed your cousin to be your executor in your will. That was before it was revealed that he had a gambling problem... Suddenly, your cousin no longer seems like the best person to be wrapping up your finances.
  3. Finances change. You may have been in those youthful years when money was tight when your documents were first drafted. Now you have a vacation home, a sizeable nest egg, retired and have started a small business out of your garage. All of these need to be considered when drafting your will.
  4. Stuff changes. You may have started a priceless baseball card collection, or you may have inherited a family heirloom that is to be passed on to a specific family member. These need to be addressed in your estate planning documents.
  5. Families change. Kids grow up and have their own kids. Marriages occur and divorces happen. All of these family relationships need to be taken into consideration. Some divorced clients believe that their wills are no longer valid after their divorce is finalized. Guess what? Your old will where your ex gets everything is still valid until you revoke it.
  6. Homes change. You've been in three different houses and lived in a few states since you had your documents drafted. Each state has different rules and guidelines about what is included in the various estate planning practices. What was valid in your old home state may not be valid in your current location.
  7. You change. Your goals at 60 are different from your goals at 30. You may want to leave a legacy for your family. Further, your health needs now are different than when you were younger.