Why Should You Update Your Estate Planning?

“I don’t need to update my stuff! I got it done in 1991; it’s fine.”

I don’t know what it is but it’s people who got their estate planning work done in the 90’s who think it was a one-and-done deal and they never have to review or update their documents. In any event, there are plenty of reasons to update your estate planning documents.

1. Your family changes. New additions are born into the family, people pass away, nasty divorces take place, names change, etc. There are tons of changes that happen every day of our lives, let alone every 5–10 years. Say you’re single with 2 kids. You get estate planning done leaving everything 50/50 to the kids. If something happens to Kid 1, then Kid 1’s 50% goes to the Kid 2. 5 or 10 years go by and Kid 1 has passed away and has 2 children (your grandchildren). If you pass away, then your estate planning leaves nothing to your grandchildren and leaves 100% to Kid 2. Updating your estate plan isn’t a chore. It can be quite easy so long as you let your estate planning attorney know and you get the documents properly signed (witnessed and notarized). Another example would be if Kid 1 develops a serious gambling or drug problem. You love Kid 1 and want to help him or her, but you wouldn’t want the 50% going outright to that child knowing where the money is going to be spent. In a Trust, you can appoint someone to manage the money for this beneficiary and make sure the funds get used for the correct reasons.
2. Your assets change. Estate planning is a life-long process. I like to tell clients that the documents are only half of the estate planning game. Once everything is signed then we hit half-time. Then it’s time for the second-half — it’s time to make sure that every asset has a home. (Can you tell I recently watched the Super Bowl?) This is also referred to as the funding of the trust, meaning retitling assets into the trust’s name. People sell their houses, people get new cars, people get investments or move around money to a new bank. When you get a new asset, give your estate planning attorney a call or email to make sure the changes follow the plan you have put in place. No asset left behind!
3. Who you want to get what changes. At one point, my sister wanted my parents’ house if something happened to them. So in their estate planning documents, they said she gets the house. But now my sister is older, has her own house, and isn’t a huge fan of my parents’ house. The beautiful thing about a revocable living trust is that you can change it (if signed properly). My parents can amend that one section to take it out and it will be as if that provision never existed. Or perhaps Kid 2 won the lottery and isn’t exactly hurting for money, but Kid 1 has always worked hard and could use a little extra inheritance to support his life. You might change the percentages from 50/50 to 80/20, or whatever you want!
4. Laws change — Years back, attorneys were drafting trusts specifically for tax reasons. Now in 2020, the federal estate tax exemption amount is $11,580,000, so those pesky A/B Trusts that are very confusing for everyone are no longer needed for most people. To make the documents cleaner and clearer, it’s time to update everything so that language is taken out. Additionally, on January 1, 2020 the SECURE Act took effect. This Act effects IRA distributions. Please note: We’ll have an upcoming article going over the SECURE Act and what you need to know.
5. You doodled on your documents. I kid you not. I can’t begin to count how many times people have brought in their original estate planning documents and they have written, scribbled, and/or doodled on them. Some people mark out names, initial and date next to the change and add in another name. Sadly, that is not how updating your documents works. As we’ve discussed, changes to your documents need to be properly witnessed and notarized. If you’ve made hand-written changes to your documents that were not formerly witnessed/notarized, then perhaps it’s time for a visit to your estate planning attorney.
6. For your own education. We don’t want you to leave a meeting not knowing what great things your documents can do for you! We definitely don’t want to you leave a meeting 20 years ago, never give your documents a second thought, and never know how they can help you. We tell people to review their documents every 2–5 years or with every big life change — like a death in the family. Some clients schedule a yearly meeting so everyone can get a refresher course on what their documents are and what they can do.
7. And most importantly, to see your awesome estate planning lawyer!

I promise we’re both incredibly nice people whose top priorities are to provide excellent service to our clients and to get to know each and every one of our clients. We hope your experience with an estate planning attorney isn’t a one time occurrence and never happens again. Alleman Law can be your Lawyer for Life (and for the generations to come)!