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Do You Need to Update Your Will or Trust?

When most local residents think of “estate planning” one document comes to mind–a will. By far the most common planning tool, a will lays out one’s wishes in the event of their passing. While millions still have not even taken this most basic step, more and more local residents have visited with professionals to have a will drafted to help guide their family in the aftermath of their passing. Also, in our area a growing number of residents have visited a San Diego estate planning attorney to have slightly more sophisticated tools created–a trust–to protect assets and save on taxes down the road.

But even those who took the time to create a will or trust must not put estate planning issues completely out of their mind. That is because these documents must be updated at certain times to ensure they work as expected at the moment they are most needed.

A recent Forbes article delved into some of these issues. There are many situations when changes need to be made. Maintaining a good relationship with a legal professional is one of the best ways to ensure you are made aware of times when your plan should be tweaked.

For example, a will or trust may need to be altered to account for changes in the law. One of the most obvious cases involves changes in tax rates or exemption levels. Many inheritance plans are tailored so that assets are passed on in amounts that do not trigger certain taxes. Yet, if those trigger rates change,
the inheritance levels may need to be altered
Beyond the law, significant life events are obviously crucial times to have estate planning matters updated. Relationship changes are perhaps the most important to consider.

Marriages and divorces have clear implications on these issues. Unfortunately, some are under the mistaken impression that default rules will automatically “correct” these issues if estate planning documents are not changed in the aftermath. But that is not the case. A new spouse, for example, will not automatically receive certain assets. Conversely, a former-spouse may still receive assets if certain changes are not made in the aftermath of a relationship break-up. A legal professional can explain all that needs to be done to ensure one’s plan fully accounts for the changed relationship, including alternation to wills and trusts, changed bank accounts, altered retirement account beneficiary designations, and more.

Marriage and divorce are not the only life events which raise estate planning issues. New additions also may necessitate planning changes, either becoming a new parent or grandparent. Changes may be needed to include these family members in an inheritance. It is again important not to assume that “default” rules will apply to these situations.

Health challenges are yet another reason to take another a look at a plan. Ideally, a long-term care plan will already be in place to ensure that one has the resources needed to receive care following medical challenges. If not, it is crucial to see what can be done as soon as possible. But even if a care plan is already in place, it is necessary to re-visit an estate plan to ensure documents are up-to-date and no steps need to be taken to make the plans work as desired.

There is no one-size-fits-all approach to creating and updating these plans. It is crucial to get tailored help and the peace of mind that comes with knowing that your wishes will actually be carried out. In our area contact a San Diego estate planning lawyer to learn more.

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