Consider starting the year right by updating your estate plan.
As the year comes to an end, we often reflect on the events that have occurred over the past 12 months. Many have toasted to formal unions, mourned the loss of loved ones, and celebrated new lives being brought into the world (and their family).
During this contemplative period, some of us may think of last year’s goals and begin to consider our goals for the New Year. Whether you plan to focus on a healthier lifestyle with a better diet and exercise, financial goals, such as saving for retirement, or other personal objectives, one goal I would urge you to consider is updating your estate plan.
There are several situations where it may be appropriate to consider an update:
No estate plan
If you do not have estate planning documents in place, it is high time to consider getting them!
Wills and trusts help direct the distribution of your personal effects and assets, but an estate plan does much more than listing “who gets what.” It can guide the timing of distributions, perhaps to protect a young beneficiary from their innocence when inheriting a windfall. You can choose in your plan the person who will assist you with financial matters and health care decisions down the road, should that need arise. Equally important, your estate plan can help with making provisions for a special needs beneficiary to ensure that person will still be eligible to receive government benefits.
There are many circumstances where an update might be appropriate. Some life changes require only a simple tweak to your estate plan, for example, if your daughter was married this past year and is now using her husband's last name. Of course the opposite may be true, where your recently-divorced daughter again uses her maiden name. You may wish to update your documents to reflect these changes for the record.
On the other hand, some life changes require a more involved update or a complete overhaul of your current estate plan. Having your first – or second or third – child is a wonderful, momentous life event, and you may wish to nominate a guardian to care for your children if you (and your spouse, if applicable) pass away while your children are still under age 18. You also may wish to consider Medicaid planning, special needs planning, or concerns that were not relevant the last time you updated estate planning documents.
Passage of time
If your estate plan was established more than five years ago, it might be time to consider an update based on the passage of time. Laws may have changed, been amended, or revoked altogether since your documents were signed, which could result in your current plan being less effective or causing unintended effects.
In addition, The SECURE Act or Tax Cuts and Jobs Act (or its sunset, set for January 1, 2026) could have an impact on your current estate plan. In particular, those with retirement accounts may benefit from a discussion with their lawyer to see how the SECURE Act will play out for them.
If one or more of these examples resonated with you or if other circumstances might call for an update to your existing estate plan – this list certainly is not exhaustive – I would recommend that speak to your attorney about the changes in your life to determine what modifications may be appropriate for you.
Elizabeth Klucher Reynolds, Esq., is an associate attorney with Nicola, Gudbranson & Cooper, LLC. in Cleveland as part of the firm’s Estate Planning, Trust, and Probate Administration group. She is licensed in Ohio and Florida.
Editor's note: Elizabeth Klucher Reynolds is the wife of Physicians Practice Editor Keith A. Reynolds. Physicians Practice is a sister publication to Medical Economics.