New Year’s Resolution to Review Estate Planning

As you come upon the New Year, it is a good time to consider whether your estate is in proper order. If you had and major changes in your life, such as divorce, the death of a loved one or a move to a different state, you should review the plan you have in place. I would encourage you to review the plan you have in place every three to five years or sooner if you have had a major life change. It may be that all is in order and no changes need to be made; however, you may also discover that the plan you originally set up simply will no longer work the way you intended.
Some of the reasons that may cause you to consider updating your Estate Plan.

1. You have moved to North Carolina from another State. It is important to have your Will and Powers of Attorney reviewed to be sure that they will be acceptable in North Carolina.

2. A person you have named to act as your Executor or Attorney-in-Fact may have had changes in their life that would prevent them from serving in that capacity.

3. You have married. Whether or not you have a Pre-Marital Agreement, you will want to update your Will to acknowledge your spouse and make any appropriate provisions.

4. You have divorced or separated. Although a Will in favor of an ex-spouse is not valid as to that spouse, it is important to put a new plan in place. In addition, it is important discuss and update all beneficiary designations on life insurance, IRAs and retirement accounts. These may not be affected or revoked by your divorce.

5. You have become a parent. You will want to be sure that your Will provides for your children both by naming a guardian and by setting up a children’s trust in the event of your premature death.

6. A beneficiary of your Estate has special needs and you have not provided specifically for these special needs. If a person with special needs that is receiving public assistance inherits money outright, often he or she loses his public benefits including health insurance. This can be truly disastrous.

7. A beneficiary of your Estate is struggling with substance abuse or other mental health issues. Protective measure can be placed in your Will to guard against the misuse of an inheritance.

8. You have had a significant change in financial circumstances.

9. You have had significant changes in your health.

10. Your documents are simply old:

A. Any health care documents drafted before 2007 were drafted before major changes in the health care laws in North Carolina.

B. Many Revocable Living Trusts were drafted when the Estate Tax Exemption was set at $600,000.00. For 2016 it is $5,450,000.00 per person. If your trust was drafted under old tax laws, it may create a hardship on your spouse that you never intended by limiting access to funds.

C. Many Durable Powers of Attorney that were drafted prior to 2007 do not have a HIPPA release in them that would allow the named agent to have access to your physician in order to determine if you are incapacitated and if he or she should begin acting as your attorney-in-fact.

With the New Year approaching, I would encourage you to review your Estate Plan to make sure it still meets your needs. The attorneys at Law Firm Carolinas are available to assist you in making that determination.

Estate Planning & Admin