Many of us tend to avoid estate planning, so if you already have a legally binding will, you are way of ahead of a lot of people. However, we are sorry to tell you that simply having a will may not be enough. Once you have that will, power of attorney, and revocable trust written, you still have to periodically check to make sure that these documents will allow your desires can be carried out as you wish. We aren’t talking about disinheriting an annoying relative but about how laws can change and affect your will. If you lock your will away and ignore it, you may not be aware of legal changes that can alter what your beneficiaries receive. Keeping your will up to date is important. NextAvenue.org offers information about legal changes that can effect your estate planning.
For example, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 may make estate planning easier for some and more complicated for others, depending on their financial situation and the state where they live.
Here are two other legal changes NextAvenue.org outlines that may create a need to alter your documents:
- “If you are married and your will or trust was drafted before January 2, 2013, you could be missing some valuable tax planning opportunities” that relate to the American Taxpayer Relief Act of 2012 (ATRA), depending on your income.
Why? In certain situations, ATRA allows someone to use a federal estate tax exclusion that person’s deceased spouse didn’t use.
- “If you live in a state that imposes its own estate tax and your will or revocable trust was executed before 2005, visit your attorney to start planning for state taxes if they’re a concern for you.”
Why? Before 2005, there was a credit for state death taxes but since then it has been phased out.
Changes to local, state, and federal tax laws that may affect your estate planning are just one reason to develop an ongoing relationship with a Fee-Only financial planner.