Consider the people who fill out forms designating who inherits assets like an insurance policy and then never go back and revise the forms when, for instance, they divorce and remarry. And then, there are the parents who have not determined who will serve as guardians for their children.
Spring is here! As you get your mop and dust pans ready for the infamous “spring cleaning” ritual, don’t forget about your financial and estate plans. You may not think of those things when starting the spring season, but any new season brings about change – and with the recent changes in the estate tax laws, you may want to make sure your estate plan is updated.
Estate planning is an ongoing process, not a one-time event. Not only are there changes in tax laws, but your life and the lives of your loved ones are in a constant change of flux as you move through life together. Accordingly, keeping your estate plan up with life changes requires action, not complacency.
This message was brought home in a recent article by The New York Times titled “Estate Planning Remains a Moving Target Under the New Tax Law.” The article notes that new tax law makes the estate tax a far less likely threat to the life’s work of many Americans. In fact, the “permanent” nature of this most recent iteration of the tax law allows individuals to exempt $5.25 million from taxation (doubled to $10.5 for married couples). Even better, the exemption is set to index for inflation.
All that noted, no changes to the estate tax or any other transfer tax will change the necessity for responsible adult Americans to make sure their estate plans are current. For example, wills, trusts, beneficiary designations and even medical directives should be reviewed periodically.
As suggested in the original article, now is a great time to do some spring cleaning. It’s a chance to review what you have done, make any needed changes and perhaps tie up some loose ends.
Reference: The New York Times (April 26, 2013) “Estate Planning Remains a Moving Target Under the New Tax Law”