How to Keep Your Estate Plan Current

When and how often do you need to review and update your estate plan? The answer will vary from person to person, family to family, but a number of factors will be influential.

Stay Up To Date on Estate Taxes

Any changes to the federal and/or New York State estate tax laws may impact your estate plan. Particularly, changes to the estate tax exemption amount may call for the dramatic revision of your estate plan. The exemption amount is the number of assets that may pass to your beneficiaries tax-free upon your death. Your Will and Trusts may need to be revised to accommodate any increases or decreases in this exemption amount. Changes in federal and state tax rates may also impact your planning strategies.

Note Changes in Family Matters

Changes in your family composition may call for you to update your Will and estate plan. The birth of children or grandchildren, the death of a loved one, marriages and divorces of yourself or any of your beneficiaries, and health care changes for you or your loved ones may require an update of your estate planning documents.

Review Your Estate Plan At Least Every Two Years

At a minimum, we recommend that our clients review their estate plans every two years or sooner if any of the above applies. Particularly, we recommend the following:

• Review your Credit Shelter Trusts and revise the funding formula or create disclaimer trusts.
• Review the title of your assets and all beneficiary designations.
• Consider making lifetime gifts of the annual exclusion amount to each of your family members.
• Regularly assess the current gift tax rate to determine if it is cost-effective to make gifts above the annual exclusion amount.
• Consider other ways to financially benefit your heirs without incurring gift or estate tax consequences, such as investing in education savings plans or making direct payments of tuition and/or medical expenses on behalf of your heirs.
• Organize your records so that the cost basis of your assets is easily calculable.
• Consider including a provision in your estate planning documents that gives your Trustees or Executors the ability to allocate your increase in tax basis.

Need Help With Your Estate Plan? 

Our Long Island estate planning lawyers are recognized leaders in the field of Trusts and Estates. If you need help creating, reviewing, or updating your estate plan, contact our Elder Law firm today!