When you purchase a new car or build your dream home, you realize that the car will require maintenance and the home will require ongoing upkeep. Your estate plan also requires maintenance. If you only implement your plan once with your attorney and never maintain it, it will erode and eventually become outdated.
There are three estate plan maintenance issues to be concerned about: asset changes, family changes and law changes.
Asset Changes When you purchase a new piece of real estate, change banks or brokers, change jobs, or retire, your estate plan becomes outdated unless you are tracking the ownership title and beneficiaries and ensuring they are aligned with your overall estate plan. If accounts are not properly funded, titled or otherwise aligned, your family could be hit with unnecessary taxes, the incorrect person receiving assets or court involvement, even if you have the most elegantly prepared wills and trusts.
If you prepared an estate plan but never maintained it, years later when you want an update, before any advice or drafting can be done, your attorney will want to know what your estate consists of. You may then think, why wasn’t my estate attorney keeping track of this for me all along, isn’t that their job?
When a person passes away, the first thing needed for an estate administration is a list of all the assets and verification of how they are titled and beneficiary designations. If you failed to maintain this during your lifetime, your legacy may be of a person who planned, but failed to maintain.
Law Changes Every year new laws are enacted that effect estate planning. In 2017, the federal Tax Cuts and Jobs Act changed federal estate tax exemption amounts. The TCJA will sunset in 2026 or may be changed prior to the sunset date, having a significant impact on estate planning strategies. In 2020, the SECURE act severely impacted how children will be taxed on inherited retirement accounts. Every other year the Texas state legislature meets and often times laws relating to estate planning are passed which require updates to estate planning strategies and documents.
Family Changes Family dynamics continually change: children become more (or less) mature, children marry, grandchildren are born, relationships change with those listed in important positions within your planning documents. Your documents may say something in them that was what you wanted five or ten years ago, but is no longer prudent. If you fail to review these types of changes you may be leaving the wrong type of legacy.
The best definition of estate planning:
I will do whatever it takes to ensure that when I am gone family harmony is realized and the inheritance I leave protects, improves and enhances the lives of my beneficiaries. Estate planning shouldn’t be a burden. Spend a little time every year to maintain it and it will never erode.
