When It’s Time To Modify Your Estate Plan
Regardless of your age or current lifestyle, estate planning is important for everyone. Knowing who will receive your assets, take care of your children, provide for your pet, or handle other matters after your death can provide peace of mind for both you and the ones you love. However, estate planning is not a one-time legal matter. Instead, it is something that requires you to review and ensure its accuracy from time to time. Knowing when it is time to modify your estate plan is important to ensure that it is accurate when you die so your loved ones are not left with confusion and doubt. At Loughlin Law, P.A., our compassionate Florida estate planning attorneys may be able to review your existing estate plans and offer guidance on making any necessary modifications. Call (561) 677-8384 to start the review process.
Why Should You Modify Your Estate Plan?
Legally, once they are created, estate plans are valid until the individual’s death. However, an estate plan with outdated and inaccurate information can make it confusing for the individual’s loved ones to determine what the deceased wanted. This confusion can draw out the probate process as the court must determine what to do when the deceased’s wishes cannot be honored.
Outdated and inaccurate information may also make it easier for someone to contest the individual’s will. They may argue that this inaccurate information is an indication that the individual was not in their right mind or make other claims that the court must consider. By ensuring that their estate plan is updated and reflects current information about their lifestyle and assets, the individual makes it both easier and faster to probate and then close the estate.
How Often Should You Modify Your Estate Plan?
Generally, estate plans should be reviewed every three to five years. This allows the individual to review their plan and look for any information that may not be accurate that they forgot about or did not realize was inaccurate. This is the general rule of thumb when someone has not had any significant life events that would prompt a modification of their estate plan. If they have had a major life event, individuals should modify their estate plan to reflect this change.
Five Common Events That Should Prompt Modifications
There are five common life events that should prompt an individual to review their estate plan and modify it if necessary. In some cases, these events may not require a modification, but the individual should still take the time to review their plan to ensure that everything still reflects their wishes.
Major Life Events
Major life events such as births, deaths, marriages, divorces, and relocations may require a modification of an individual’s estate plan. Per FL §732.502, a will that is valid in the state or country in which it was written will be valid in Florida, but relocations often result in other changes, such as the sale of a home, that may make parts of an existing estate plan no longer accurate.
Additionally, FL §732.507 states that upon a divorce becoming final, any will provisions that reference the former spouse becomes void. Those provisions will be treated as if the former spouse died before the will creator. However, the individual may want to redirect the provisions related to their former spouse to a new spouse, an adult child, or someone else rather than allowing the probate court to determine where those assets go. Modifying their estate plan allows the individual to retain control over what happens to their estate instead of leaving it up to a judge who has never met them and does not know anything about what they would want.
Financial Changes
Financial changes such as asset acquisitions, changes in insurance policies, or financial shifts such as a significant increase or decrease in income or investments may prompt a modification of an estate plan. For example, an individual who had a modest estate and only created a will but then inherited a large sum of money may want to create a trust to protect their inheritance. Individuals who are uncertain about whether a financial change is significant enough to warrant modifying their estate plan may want to consult with an estate planning attorney with Loughlin Law, P.A. for legal advice.
Health Changes
No one wants to think about the fact that they will die one day. Health changes can force them to think about it, though, and that can be a good time to review an estate plan and ensure that it still reflects the individual’s wishes.
Additionally, an estate plan is more than just the distribution of the individual’s assets after they die. Estate plans also include documents such as powers of attorney, living wills, and other advance directives that direct others as to when and what kind of treatment the individual wants if they are incapacitated and unable to make those decisions for themselves. Health changes may cause an individual to realize that what they have put in their estate plan regarding these matters is not what they want anymore. Modifying these documents to reflect their current wishes can be crucial to ensuring that they are given the appropriate care and treatments in the event they cannot speak for themselves.
Shifting Into Retirement
When an individual creates their estate plan while they are still working, they do so thinking of the income they will still earn, the assets they may still acquire, and other information based on continuing to work. However, when the individual moves into retirement, they shift from contributing to their estate to taking from it as they use their existing assets and money to enjoy life in retirement. This may include traveling, purchasing a new home as they relocate to a new state or country, and other changes that make a significant change to their assets. Reviewing their estate plan and ensuring that everything is still correct and that they can begin or maintain a particular lifestyle with their existing assets and money can be important to ensure that the individual enjoys the rest of their life and can still leave behind the legacy they want their family and friends to remember.
Children Becoming Adults
When parents create estate plans when they have minor children, many of the details revolve around ensuring those children are cared for. They may have named guardians, created trusts that would provide the funds to care for the children, left assets to particular individuals with the intent that those individuals would one day give them to the children, and named beneficiaries on life insurance policies or financial accounts expecting that those beneficiaries would use the money to care for the children or invest it and give it to the children later.
As those children become adults, that information becomes outdated and inaccurate. While minor children cannot be directly left anything, adult children can. However, the court may not distribute the parent’s assets among the children as the parent would have wanted. Modifying the estate plan as the children become adults to reflect what each child should receive allows parents to ensure that their assets are distributed appropriately. The parent may also make changes to help protect their child’s inheritance from potential divorce or creditors in the future. Additionally, parents may wish to change powers of attorney to name one or more of their adult children to act on their behalf.
Two Less Common Reasons To Modify Your Estate Plan
There are a number of significant life events that might prompt a modification to an estate plan. There are also some less common reasons that an individual may want or need to change their estate plan, including an executor who is no longer legally qualified or a beneficiary who may not be able to manage an inheritance.
Executor Becomes Legally Disqualified
FL §733.303 indicates that to be executor of someone’s estate, an individual cannot have been convicted of a felony nor can they have been convicted of neglect, abuse, or exploitation of an elderly person or disabled adult in any state or foreign jurisdiction. They must also be mentally and physically capable of performing the duties required of being an executor and be at least 18 years old. Therefore, if an individual has been named executor of someone’s estate and is later convicted of a felony, convicted of neglect abuse, or exploitation, or becomes mentally or physically incapable of carrying out their duties as executor, the estate grantor will need to modify their estate plan to name a new executor.
FL §733.504 indicates additional reasons that the probate court may remove an executor of an estate. Individuals may want to review these reasons as well when determining whether the individual they have named or want to name as executor is qualified.
Beneficiary Cannot Manage Inheritance
Most people leave an inheritance to a loved one with the hope that the beneficiary will use it wisely. Unfortunately, in some instances, this is not the case. If an individual knows that one of their beneficiaries has a mental health condition, alcohol or substance abuse issue, gambling issue, or significant debts that could take most or all of their inheritance, the individual may want to explore other methods of providing for that beneficiary will ensuring that the inheritance is not at risk. For example, if the individual intended to leave a life insurance policy to the beneficiary, they may want to speak with a lawyer about creating a trust, making the trust the beneficiary of the life insurance policy, and making their beneficiary a beneficiary of the trust so that the trust can manage the money on the beneficiary’s behalf.
How Can You Modify or Update Your Estate Plan?
Florida allows a will to be modified by either writing and executing a new one or adding a codicil to an existing will. The codicil must be executed the same way a will must be executed. Making changes to a trust’s terms or beneficiaries may require the assistance of an attorney, and if an individual is considering creating a trust, they may want to consult with a Boca Raton estate planning attorney to determine the type of trust that meets their needs.
Beneficiary designations on life insurance policies, retirement or investment accounts, or other assets that have beneficiary designations may be updated by contacting the company or bank holding the policy or account and requesting the changes be made. Changes to powers of attorney, living wills, and other advance directives can be made with the assistance of an attorney or by simply filling out a new form. Other estate plan changes that may be required, such as changing a ladybird deed, may also be done with the assistance of an attorney if needed.
How a Florida Estate Planning Attorney May Be Able to Assist You
Estate planning can be complicated, particularly if an individual has significant assets or complicated family relationships. While an attorney is not always required to create an estate plan, they can be beneficial. A skilled South Florida estate planning attorney can assist with ensuring that a trust is properly structured and funded, a will is properly written and executed, and that powers of attorney and other advance directives are properly completed and legally recorded as needed. They can also provide guidance to your loved ones after your death, assisting them in understanding the probate process and what may be expected of them. If you would like to learn more about creating or modifying your estate plan, call Loughlin Law, P.A. at (561) 677-8384 for a consultation to continue the conversation.
