7 Reasons Why its Time to Review Your Estate Plan
All too often, clients who have executed estate plans don’t recognize the importance of reviewing their documents from time to time. Unfortunately, in some instances, your loved one may no longer be able to revise his or her will or trust.
Ability to Revise an Estate Plan
In order to revise your estate plan, you must have the requisite mental capacity at that time. As a result, if you no longer have “testamentary capacity”, changes cannot be made to your will or trust.
A person has testamentary capacity if, at the time of making any changes to his or her will or trust, they understand the nature of the act of making a testamentary disposition, the nature and situation of his or her property, and their relationship to the persons who have claims upon their bounty and will be affected by the document.
Durable powers of attorney are considered a contract between the principal and his or her agent and require an even higher level of capacity and, as a result, you may be precluded from revising these documents in the future.
Things change. On June 25, 1963, John F. Kennedy stated that “change is the law of life, and those who look only to the past or present are certain to miss the future.” This explanation is precisely the reason that periodic review of your estate plan is so important – things change. In the event of a serious illness that renders you incapacitated, it may be too late to complete changes to your plan.
While there are many important reasons to review your estate plan from time to time, here’s an overview of seven reasons to do so:
Beneficiaries
Benjamin Franklin’s son, William Franklin, supported the British before and during the Revolutionary War. William moved to England in 1782, never to return to America. Both actions resulted in Franklin substantially disinheriting his only living son.
Have events occurred that affect how you desire to distribute your estate? It may be time to consider whether you want to alter your distributions to exclude a beneficiary or, alternatively, is it appropriate to now include a loved one that you may have been previously estranged from?
Assets and/or Income
Your assets and/or income may have significantly changed since you originally executed your estate plan. Hopefully, your financial situation has improved significantly (the lottery, an inheritance, or just commonsense savings) and you may now want to consider the inclusion of charitable beneficiaries that previously may not have been feasible.
Marital Status
A change in marital status is almost always an appropriate time to consider a review of your estate plan. Under Nevada law, a divorce does not automatically revoke estate planning documents.
However, to the extent that there are any distributions provided to a former spouse, those provisions will be treated as if the spouse predeceased you and he or she will receive nothing from your estate plan.
In the event, you have young children and any distributions are to be held in trust for their benefit, it is important to review the estate plan to provide an alternative successor trustee in the event you’re not comfortable with your former spouse serving in that capacity.
Illness or Disability
In the event you suffered from a serious illness or disability since the original execution of your estate plan, your documents should be renewed. Careful consideration should be made regarding your designations pertaining to life-sustaining treatment, designation of your health care agent, and limitations if any upon the authority of the agent.
More importantly, statutory durable powers of attorney now include statements regarding living arrangements in the event of incapacity. More importantly, if your durable power of attorney for healthcare decisions doesn’t specifically authorize your agent to be able to transfer you to an assisted living or skilled nursing care facility, these tasks may not be completed without time-consuming and expensive guardianship proceedings!
Nominations for Successor Trustee, Personal Representative, or Agent
The use of a revocable living trust is an excellent way to avoid the time and expense of probate. However, court intervention may be necessary for the event you fail to periodically review your document and upon your passing, it’s learned that the person nominated to serve as successor trustee had predeceased you or are suffering from an illness and are unable to serve. This can easily be avoided by periodic reviews of your nominations. Similarly, you should review your nominations in your will and durable powers of attorney.
Dispositions of Remains
Gene Roddenberry (the creator of the original Star Trek) asked that his ashes be scattered in space. The request was fulfilled on April 21, 1997, when his ashes and those of 24 other people, including Timothy Leary’s ashes, were launched into orbit on a Pegasus rocket provided by Celestis, Inc.
In many instances, when persons initially execute their estate planning documents they did not have a specific intention regarding the disposition of their remains. However, in the event you now have specific desires regarding funeral arrangements, location of your burial or cremation, your estate plan should be updated to reflect these desires.
Disposition of Personal Property
Robin Williams did an excellent job of planning his estate, but the front page of the Arts section of the February 3, 2015, New York Times reported that his widow and his three children from his two prior marriages were in conflict over the issue of how his “cherished belongings that include his clothing, collections and personal photographs” should be passed.
A will or a trust may refer to a written statement or list. To dispose of items of tangible personal property not otherwise specifically disposed of by the will (other than money, evidences of indebtedness, documents of title, securities, and property used in a trade or business). There are specific requirements that the list must meet in order to be admissible as evidence of the intended disposition.
This provision is rarely used by someone creating an estate plan and, instead, they generally authorize the personal representative or successor trustee to decide how to divide any tangible personal property. However, the problem is that in many situations this failure to plan for the future results in contention and strife between family members.
Estate planning documents shouldn’t be put away and forgotten. Review of your estate plan is essential to ensuring that your goals are properly addressed in the future and an experienced estate planning attorney should be consulted to assist you with this task to ensure that you maintain peace of mind.
Whether you would like to start Estate Planning today or you need to review and change your Estate Plan contact an estate planning lawyer in Las Vegas for your needs.
For more than 30 years, Attorney Lee A. Drizin has practiced in the areas of estate planning, probate, trusts, guardianship, and real estate matters representing clients throughout the state of Nevada.
Drizin Law is providing this information for educational purposes only. It should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. This information is based on general principles of Nevada law at the time it was created and you should be aware laws frequently change. Moreover, the laws affecting you may differ depending on the circumstances. You should consult with a qualified attorney in your own state or jurisdiction concerning your particular situation. Review of this information does not create an attorney-client relationship.
