Spring Clean Your Estate Plan

It’s easy to want to sit back after achieving your financial goals. But that won’t be possible because things are constantly changing, including the members of your family circle and the value of your assets. Extraordinary things can impact them, such as changes in tax rules, unexpected litigation, and education expenses. Even though half of the adults in the U.S. do not have a will, we know better than to let the state dictate where our money goes. Let’s talk about some of the things that you can do to stay ahead of your finances and when you can do that.

Everything in its Right Place

It’s important to review your estate plan at a regular frequency– some parts need more frequent review than others. The estate plan is often reviewed when financial plans are reviewed, even though they may not need adjusting. One rule of thumb is every three to five years or when there is a life event, such as a new dependent or grandchild, change in financial circumstances or marital status. Those types of events may naturally trigger in your mind the need for a visit with your estate planning expert.

Things that are less likely to move you in that direction include changes in federal or state tax laws that impact your income and investments. An annual review of your estate plan will ensure that your legacy is passed on according to your wishes and that your beneficiaries receive the intended benefits. A consultation with the lawyers here at Lowthorp Richards gives you the benefit of access to expertise in many areas of law – not just estate planning, but real estate law, tax lawyers, business litigation experts, etc.

Why in the Spring?

The romantics and poets would relate this time of year to love, youth, and spirit, but that is purely coincidental. Really, if you are reviewing your estate plan on an annual basis, it does not matter when you perform the review.

The advantage of spring is that it is tax time, and many people are talking about personal finances, some people are filing taxes, and pragmatically speaking, you are not on summer vacation or attending winter holiday parties. This type of review, for most people, is not an entertaining endeavor, though it can be educational and inspiring because it reminds you of the long-lasting benefits and care for loved ones that is being provided.

How to get started

An estate plan is a comprehensive plan designed to enact specific wishes for your belongings and assets. So, it is natural to start by thinking about your list of beneficiaries and assets. Has anything significantly changed in that list? The pandemic has certainly changed some people’s fortunes, and the real estate and stock markets have contributed to that. It has also changed where people live, which impacts their availability to step in as a guardian or trustee– if that is an aspect of an estate plan.

It Happens

Oftentimes, when one is the recipient of a large sum of unexpected money – think lottery winnings or inheritance – they don’t stop to change their estate plan. Maybe they will when they come back from Hawaii, but it usually isn’t the first thing on their celebration list.

This type of oversight would be caught up when you examine your assets in an annual estate plan asset review, springtime or otherwise. You could then request any appropriate adjustments to a trust, will or estate plan feature to make the best use of those funds according to your wishes. Similarly, advanced care directives or POLST forms should be updated if end-of-life wishes change.

People Change

If anything happens to you, the people whom you have chosen to step up can undergo a change in their capacity to do the tasks that you have recruited them for. Managing your assets, paying debts and liquidating assets, or taking care of dependents are significant tasks. You need to keep up with how reliable these trusted ones can be given in life-changing circumstances. In California, something as commonplace as a divorce could throw off a friend’s ability to be there to carry out these duties. An annual review will help to make sure that the right person is in the right position.

If you have dependents, changes in their status may or may not be easy to see in the short term. The decision to allow an inheritance outright instead of a protected distribution may occur overnight. One person’s 40-year-old could be less ready than a 30-year-old sibling.  It is hard to see changes in maturity, and friends and family can help evaluate the readiness of dependents. On the opposite side of the life cycle, it is sometimes difficult to see when someone loses their capacity to make financial and other important decisions and when it might be important to enlist the aid of a conservator. With regards to heirs in midlife, the opioid crisis has hit many parts of the country and highlighted the need to watch out for signs of substance abuse. While you are in risk analysis mode, make sure there are no signs of gambling addictions that might change your thoughts on distribution.

Here to Help Preserve Your Estate

It is too often the case that it is easier to lose money than to keep it.  Our lawyers and staff are on top of the laws that impact your estate plan. We have counseled numerous clients on these and other fundamental matters. We are happy to assist by fielding your questions, providing legal advice, examining your current estate plan and any task that can help advance you towards your goals. Call the trusted estate planning attorneys at Lowthorp, Richards, McMillan, Miller & Templeman at (805) 981-8555 or fill out our online contact form. We operate primarily in the Tri-Counties area – Ventura, Santa Barbara, San Luis Obispo.

NOTE: The information contained herein is not intended to be legal advice and the reader should know that no Attorney-Client relationship or privilege is formed by the posting or reading of this article which is also not intended to solicit business.

Cristian R. Arrieta, Lowthorp Richards McMillan Miller & Templeman, A Professional Corporation, 300 E. Esplanade Drive Suite 850, Oxnard, CA 93036