When Should You Update Your Estate Plan?

POSTED: MAY 2012

OK, so you have created your estate plan; congratulations. Now what? Do you file it in a drawer somewhere, never to be looked at again? That would not be wise. Once you’ve created an estate plan, it is important to keep it up to date. You will likely need to take a fresh look at your estate plan after certain key life events. While these guidelines are not all inclusive or set it stone, following them should help you ensure that your estate plan continues to reflect your current wishes.

Whether it is your first or a later marriage, you will need to update your estate plan after you get married. A spouse does not automatically inherit your estate simply because you get married.

Under New York law, the surviving spouse has certain inheritance rights, but they may not be what you want. You need a will to spell out how much you wish your spouse to get. Your estate plan will get more complicated if your marriage is not your first. You and your new spouse need to figure out where each of you wants your assets to go when you die. If you have children from a previous marriage, this can be a difficult discussion. There is no guarantee that if you leave your assets to your new spouse, he or she will provide for your children after you are gone. There are a number of options to ensure your children are provided for, including creating a trust for your children, making your children beneficiaries of life insurance policies, or giving your children joint ownership of property. Even if you don’t have children, there may be family heirlooms or mementos that you want to keep in your family.

Once you have children, it is important to name a guardian for your children in your will. If you don’t name someone to act as guardian, the court will choose the guardian. Because the court doesn’t know your kids like you do, the person they choose may not be ideal. In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for your children when they get older. Similarly, when your children reach adulthood, you will want to update your plan to reflect the changes. Unless they have special needs, they will no longer need a guardian, and they may not need a trust. You may even want your children to act as executors or hold a power of attorney.

If you get divorced or your spouse dies, you will need to revisit your entire estate plan. It is likely that your spouse is named in some capacity in your estate plan – for example, as beneficiary, executor, or power of attorney. If you have a trust, you will need to make sure your spouse is no longer a trustee or beneficiary of the trust. You will also need to change the beneficiary on your retirement plans and insurance policies.

One part of estate planning is estate tax planning. When your estate is small, you don’t usually have to worry about estate taxes because only estates over a certain amount are subject to estate taxes. These amounts have changed several times over the past few years, so it is important to keep up to date in this regard. As your estate grows, you may want to create a plan that minimizes your estate taxes. If you have a plan that focuses on tax planning, but you experience a decrease in assets, you may be able to simplify your estate plan.

There are other reasons to update your estate plan, including: you move to another state, a change in the tax laws, a nominated fiduciary is no longer able to serve, you wish to change your beneficiaries, or it has been more than 5 years since it has been reviewed by an attorney. Remember, your estate plan is like your golf game: it is always a work in progress.

Bernard A. Krooks, Esq., is a founding partner of Littman Krooks LLP and has been named a “New York Super Lawyer” every year since 2006 and one of the top 25 lawyers in Westchester County. He has been honored as one of the Best Lawyers in New York and America since 2006. A past president of NAELA, SNA, a CELA, and a fellow of ACTEC, Mr. Krooks may be reached at (914) 684-2100 or (212) 490-2020, or visit the firm’s website at www.littmankrooks.com.

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