There are two key components of estate planning: putting together a strategy, and then keeping that strategy current. According to the American Bar Association, approximately 55 percent of people living in Detroit and across the country do not have any estate planning documents in place when they pass away.
The hope is that the 45 percent who do have a plan have taken the steps to keep it updated. Taking years and even decades between updates can mean a will or trust is missing some important factors because the following has not happened:
- Adding new beneficiaries
- Removing people who have passed away or otherwise been disinherited
- Including new property or new property values
Fortunately, keeping an estate plan up-to-date is simple when people follow basic rules. The first is that the plan should be reviewed either on an annual basis or every few years. Forbes magazine notes that one of the benefits of doing so is to stay abreast of any changes that have occurred in tax laws. Estate taxes, capital gains taxes and other fees surrounding wills and trusts change often. To take advantage of the best possible strategy for leaving a legacy, people should be aware of how current taxes will affect their plan.
The other important time to review a plan is following a significant change, such as a birth or death, marriage or divorce, or a significant acquisition of property. For some people, minor children reaching the age of 18 will affect the way assets are allocated or distributed.
While it may seem as though leaving property to others should be a simple process, that is often not the case. Working with a professional can ensure not only that people’s wishes are kept, but that family disputes are prevented.