October 2, 2024 • 8 mins
When Should You Update Your Estate Plan?
Once you have created an estate plan, it is important to keep it up to date. You will need to revisit your plan after certain key life events, including marriage, the birth of children, divorce or the death of a spouse, and a significant increase or decrease in assets. Here’s why.
Marriage.
Whether it is your first or a late marriage, you will need to update your estate plan after you get married. A spouse does not automatically become your heir once you get married. In Ohio, without a Will, your spouse would get one-third to one-half of your probate assets. The rest will go to other relatives. You need a Will to spell out how much you wish your spouse to get. Your estate plan will get more complicated if your marriage is not your first. You and your new spouse need to figure out where each of you wants your assets to go when you die. If you have children from a previous marriage, this can be a difficult discussion. There is no guarantee that you
leave your assets to your new spouse, he or she will provide for your children after you are gone. There are a number of options to ensure your children are provided for, including creating a trust for your children, making your children beneficiaries of life insurance policies, or giving your children joint ownership of property. Even if you don’t have children, there may be family heirlooms or mementos that you want to keep in your family.
Minor Children.
Once you have children, it is important to name a guardian for your children in your Will. If you don’t name someone to act as guardian, the court will choose the guardian. Because the court doesn’t know your kids like you do, the person they choose may not be ideal. In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for your children when they get older. Similarly, when your children reach adulthood, you will want to update your plan to reflect the changes. They will no longer need a guardian, and they may not need a trust. You may even want your children to act as executors or hold a power of attorney.
Divorce or Death of a Spouse.
If you get divorced or your spouse dies, you will need to revisit your entire estate plan. It is likely that your spouse is named in some capacity in your estate plan – for example, as beneficiary, executor, or power of attorney. If you have a trust, you will need to make sure your spouse is no longer a trustee or beneficiary of the trust. You will also need to change the beneficiary on your retirement plans and insurance policies.
Increase or Decrease in Assets.
One part of estate planning is estate tax planning. When your estate is small, you don’t usually have to worry about estate taxes because only estates over a certain amount, depending on current state and federal law, are subject to estate taxes. As your estate grows, you may want to create a plan that minimizes your estate taxes. If you have a plan that focuses on tax planning, but you experience a decrease in assets, you may want to change your plan to focus on other things.
Other.
Other reasons to have your estate plan updated could include: ·
You move to another state; ·
Federal or state estate tax laws have changed; ·
A guardian, executor, or trustee is no longer able to serve; ·
You wish to change your beneficiaries; ·
It has been more that five years since the plan has been reviewed by an attorney.
Contact your elder law attorney to update your plan.
Once you have created an estate plan, it is important to keep it up to date. You will need to revisit your plan after certain key life events, including marriage, the birth of children, divorce or the death of a spouse, and a significant increase or decrease in assets. Here’s why.
Marriage.
Whether it is your first or a late marriage, you will need to update your estate plan after you get married. A spouse does not automatically become your heir once you get married. In Ohio, without a Will, your spouse would get one-third to one-half of your probate assets. The rest will go to other relatives. You need a Will to spell out how much you wish your spouse to get. Your estate plan will get more complicated if your marriage is not your first. You and your new spouse need to figure out where each of you wants your assets to go when you die. If you have children from a previous marriage, this can be a difficult discussion. There is no guarantee that you
leave your assets to your new spouse, he or she will provide for your children after you are gone. There are a number of options to ensure your children are provided for, including creating a trust for your children, making your children beneficiaries of life insurance policies, or giving your children joint ownership of property. Even if you don’t have children, there may be family heirlooms or mementos that you want to keep in your family.
Minor Children.
Once you have children, it is important to name a guardian for your children in your Will. If you don’t name someone to act as guardian, the court will choose the guardian. Because the court doesn’t know your kids like you do, the person they choose may not be ideal. In addition to naming a guardian, you may also want to set up a trust for your children so that your assets are set aside for your children when they get older. Similarly, when your children reach adulthood, you will want to update your plan to reflect the changes. They will no longer need a guardian, and they may not need a trust. You may even want your children to act as executors or hold a power of attorney.
Divorce or Death of a Spouse.
If you get divorced or your spouse dies, you will need to revisit your entire estate plan. It is likely that your spouse is named in some capacity in your estate plan – for example, as beneficiary, executor, or power of attorney. If you have a trust, you will need to make sure your spouse is no longer a trustee or beneficiary of the trust. You will also need to change the beneficiary on your retirement plans and insurance policies.
Increase or Decrease in Assets.
One part of estate planning is estate tax planning. When your estate is small, you don’t usually have to worry about estate taxes because only estates over a certain amount, depending on current state and federal law, are subject to estate taxes. As your estate grows, you may want to create a plan that minimizes your estate taxes. If you have a plan that focuses on tax planning, but you experience a decrease in assets, you may want to change your plan to focus on other things.
Other.
Other reasons to have your estate plan updated could include: ·
You move to another state; ·
Federal or state estate tax laws have changed; ·
A guardian, executor, or trustee is no longer able to serve; ·
You wish to change your beneficiaries; ·
It has been more that five years since the plan has been reviewed by an attorney.
Contact your elder law attorney to update your plan.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:03):
You're listening to Simply Money presented by all Worth Financial,
I mean me Wagner along with Steve Ruby, how.
Speaker 2 (00:08):
Many of you.
Speaker 1 (00:09):
Somewhere on your list of things to do, maybe toward
the bottom is to update your estate plan. Was talking
to someone this week who brought in their will for
me to look at two adult children, and the will
was written before one of them was born. Probably time
to update that estate plan. Joining us tonight is our
(00:29):
estate planning expert Mark Rekman from the law firm of
Wood and Lamping with when we should all be thinking
of updating that estate plan. I'm assuming you're on board
with You've had another child and it's spent twenty years.
Probably time to update that of course.
Speaker 3 (00:45):
And you know the thing, amy is that when major
events happen in our lives, the last thing in the
world we think is to call our lawyer and update
our estate plan, and probably rightfully so. But once things
calm down, you do need to stop and think does
this really make change in what I want to do
long term?
Speaker 1 (01:02):
So what are the things that we need to be
thinking about when it comes to changes so that you know,
if it's on the forefront of our mind, it should be.
Speaker 3 (01:11):
I think of a sort of key life events. The
first one on my list, of course would be marriage.
Birth of a child is a close second. Divorce is
a big one. Death of a spouse is also a
big one. If we've got a significant increase in our
net worth, our assets, or a decrease, you know, an
increase could be inheritance that comes in or a windfall
(01:34):
of some kind, or success in a business transaction. A
decrease can be the result of a divorce, or it
could be the result of some horrendous economic activity or
a failure of a business or but those kinds of
life events. Really, it's a good time to revisit your
estate plan.
Speaker 2 (01:55):
Yeah. When I have anual review meetings with folks that
I work with, it's always touched on. At least you know,
where are you with your estate planning documents? When's the
last time you review them? If I'm working with somebody
that's a newer client, then I will tell them that
I will bug them about it until they either get
it done or they tell me to shut up about
it because it is important. So you brought up some
(02:16):
key life events here, Let's look at marriage, whether it's
your first or maybe a marriage later in life. Obviously,
there are some things that we need to look at
when it comes to updating our state plan.
Speaker 3 (02:27):
Well, what most people think is that your spouse is
going to inherit everything, whether you have a will or not,
and that's simply not true. It's not true in Ohio
or Kentucky or India, any of our local states. The
truth is that your spouse will only receive a portion
of your state. In many states, it depends on whether
it's a first marriage. It depends on whether or not
(02:48):
there are children or children from a previous marriage. But
the point is that without a will, you don't really
control who gets your assets. So when you get married,
you need to decide that you need to revisit your
will now. Sometimes, in the case of second marriages, you
may not want to leave all of your assets to
your spouse. You may have responsibilities to minor children, You
(03:12):
may wish to provide financial support to adult children or
to grandchildren. Certainly, if I'm in a second marriage and
I decide I want to leave all of my assets
to my wife, my second wife, I need to stop
and think for a minute, what will she do at
her death? Because if my wife dies after me. Her
(03:33):
will controls what happens to money that I give to her.
She may leave it to her children, and my children
will not be included. Is that what I want? Those
are the kinds of things that come into play in
a second.
Speaker 2 (03:45):
Marriage, and the answer is probably not. That's probably not
what you want, I would say for most.
Speaker 1 (03:50):
Folks, which is why it's complicated, right. You know, if
you wait on these things to go through probate, it's
likely not going to turn out the way you wanted to.
Speaker 3 (03:59):
Well, it's not going to turn out the way you
think it it will, Yeah, that's for sure. And you
know what, I have found that men and women approach
this problem differently, and that women have a much stronger
interest in the financial wellbeing of their children than most
men that I counsel. I'm not sure why. I'm certainly
there's no right or wrong to this, but it matters.
(04:22):
So you may not have the same testamentary plan and
a second marriage, the husband and wife may not have
the same provisions in their will.
Speaker 1 (04:30):
You know, Mark. What I also find is many people,
especially younger families, who draw up a state planning documents
is often because they want to make sure that the
piece about what happens to the children, if something happens
to them is taken care of right, and it's like
once they do that, it's like they said it and
forget it and they don't revisit it for years, and
(04:51):
what they're forgetting is, Okay, maybe those kids are now eighteen,
nineteen twenty adults, but you want to also want to
make sure that they're cared for if something catastrophic were
to happen to both of you in a similar way,
and it may not be just guardianship, but it's financially.
Speaker 3 (05:08):
Well, that's right. So you start with the question are
their minor children? If there are minor children, then you
need to provide for a guardian, and you need to
provide for a trustee to manage money until whatever age
you think is appropriate. When those children get older, it's
time to revisit that because you may want to include
your children in different ways. For example, when my wife
(05:30):
and I got a little older and our kids were grown,
we revised our will to name our sons as the executor.
So my wife, of course is my primary executor, but
if she's not around, then my children. I have two
sons and I've named them in birth order. They're each
capable of doing this job. The money goes to them,
and so the point is that I've worked them into
(05:51):
key roles. Both of them now hold power of attorney,
living will, power of attorney for healthcare, all the documentation
we talk about on the show all the time. I
work my children into those roles when they became adults.
Speaker 2 (06:05):
It's a testament to changes over time and the importance
of updating your estate planning documents. And that's a great one.
I have a minor daughter, and you know, she's nine
years old, and obviously as she grows up will probably
make some changes just like you have, so, you know,
pivoting a little bit. Obviously, there's other life changes that
might not be quite as great as a child growing
(06:27):
older and witnessing that divorce death of a spouse. Obviously,
you know, if something like this happens, some very important
changes that we would likely need to make as well.
Speaker 3 (06:39):
Well. That's certainly true. When the first thing that comes
to mind is that if I have a will that
leads everything to my wife she predeceases me, I need
to go back and check that will because she's no
longer going to live outlive me. I need to be
sure that I've made the provisions that are appropriate for
the next level. I need to be sure the executor
that I nominate is appropriate, the power of attorney is appropriate.
(07:01):
All those things need to be updated in the event
of divorce or death of a spouse.
Speaker 1 (07:07):
Well, I think you know from the divorce standpoint mark
as you know, I'm someone who went through that, and
you know, the first time around when I was married
and you're thinking through a state planning feels really different
than when you go through it in your divorce and
you're thinking about, Okay, this is what I've now have,
and I want to make sure that my children and
(07:27):
you're thinking through all of those things. So it's interesting
how just depending on where you are and what's happened
in your life, you think very differently about estate planning.
Speaker 3 (07:37):
And you should and that's appropriate, and so that's why
you should be revisited at least with each major life change.
But I'm a great believer in revisiting this every five
or ten years. Whether there's a significant we've not talked about,
is significant changes in your assets, you inherit a significant
amount of money, it may have a big impact on
(07:58):
your state plan. It may expose you to a state
taxes in a way that could be avoided. It may
change the way you want to leave your money to
your children. Perhaps put it in trust, perhaps put a
provision for grandchildren, Perhaps make some charitable gifts to your
favorite university or your favorite church, or whatever it may be.
Speaker 1 (08:16):
Yeah, I think there's just a lot to think through
here in regardless of your age or stage. If you've
got a four to one k or a home or cars,
you have an estate. It doesn't necessarily need to be
a tree lined, gated situation that you think of an estate.
And for those of you who still have this on
your to do list, please bump this up a little higher, right.
It's a big deal to make sure that you have
(08:38):
this taken care of. It's an act of love, a
labor of love to your family. Great insights as always
from our Grekman, our state planning expert from the law
firm of Wood and Lamping. You're listening to Simply Money
presented by all Worth Financial here on fifty five KRC,
the talk station
You're listening to Simply Money presented by all Worth Financial,
I mean me Wagner along with Steve Ruby, how.
Speaker 2 (00:08):
Many of you.
Speaker 1 (00:09):
Somewhere on your list of things to do, maybe toward
the bottom is to update your estate plan. Was talking
to someone this week who brought in their will for
me to look at two adult children, and the will
was written before one of them was born. Probably time
to update that estate plan. Joining us tonight is our
(00:29):
estate planning expert Mark Rekman from the law firm of
Wood and Lamping with when we should all be thinking
of updating that estate plan. I'm assuming you're on board
with You've had another child and it's spent twenty years.
Probably time to update that of course.
Speaker 3 (00:45):
And you know the thing, amy is that when major
events happen in our lives, the last thing in the
world we think is to call our lawyer and update
our estate plan, and probably rightfully so. But once things
calm down, you do need to stop and think does
this really make change in what I want to do
long term?
Speaker 1 (01:02):
So what are the things that we need to be
thinking about when it comes to changes so that you know,
if it's on the forefront of our mind, it should be.
Speaker 3 (01:11):
I think of a sort of key life events. The
first one on my list, of course would be marriage.
Birth of a child is a close second. Divorce is
a big one. Death of a spouse is also a
big one. If we've got a significant increase in our
net worth, our assets, or a decrease, you know, an
increase could be inheritance that comes in or a windfall
(01:34):
of some kind, or success in a business transaction. A
decrease can be the result of a divorce, or it
could be the result of some horrendous economic activity or
a failure of a business or but those kinds of
life events. Really, it's a good time to revisit your
estate plan.
Speaker 2 (01:55):
Yeah. When I have anual review meetings with folks that
I work with, it's always touched on. At least you know,
where are you with your estate planning documents? When's the
last time you review them? If I'm working with somebody
that's a newer client, then I will tell them that
I will bug them about it until they either get
it done or they tell me to shut up about
it because it is important. So you brought up some
(02:16):
key life events here, Let's look at marriage, whether it's
your first or maybe a marriage later in life. Obviously,
there are some things that we need to look at
when it comes to updating our state plan.
Speaker 3 (02:27):
Well, what most people think is that your spouse is
going to inherit everything, whether you have a will or not,
and that's simply not true. It's not true in Ohio
or Kentucky or India, any of our local states. The
truth is that your spouse will only receive a portion
of your state. In many states, it depends on whether
it's a first marriage. It depends on whether or not
(02:48):
there are children or children from a previous marriage. But
the point is that without a will, you don't really
control who gets your assets. So when you get married,
you need to decide that you need to revisit your
will now. Sometimes, in the case of second marriages, you
may not want to leave all of your assets to
your spouse. You may have responsibilities to minor children, You
(03:12):
may wish to provide financial support to adult children or
to grandchildren. Certainly, if I'm in a second marriage and
I decide I want to leave all of my assets
to my wife, my second wife, I need to stop
and think for a minute, what will she do at
her death? Because if my wife dies after me. Her
(03:33):
will controls what happens to money that I give to her.
She may leave it to her children, and my children
will not be included. Is that what I want? Those
are the kinds of things that come into play in
a second.
Speaker 2 (03:45):
Marriage, and the answer is probably not. That's probably not
what you want, I would say for most.
Speaker 1 (03:50):
Folks, which is why it's complicated, right. You know, if
you wait on these things to go through probate, it's
likely not going to turn out the way you wanted to.
Speaker 3 (03:59):
Well, it's not going to turn out the way you
think it it will, Yeah, that's for sure. And you
know what, I have found that men and women approach
this problem differently, and that women have a much stronger
interest in the financial wellbeing of their children than most
men that I counsel. I'm not sure why. I'm certainly
there's no right or wrong to this, but it matters.
(04:22):
So you may not have the same testamentary plan and
a second marriage, the husband and wife may not have
the same provisions in their will.
Speaker 1 (04:30):
You know, Mark. What I also find is many people,
especially younger families, who draw up a state planning documents
is often because they want to make sure that the
piece about what happens to the children, if something happens
to them is taken care of right, and it's like
once they do that, it's like they said it and
forget it and they don't revisit it for years, and
(04:51):
what they're forgetting is, Okay, maybe those kids are now eighteen,
nineteen twenty adults, but you want to also want to
make sure that they're cared for if something catastrophic were
to happen to both of you in a similar way,
and it may not be just guardianship, but it's financially.
Speaker 3 (05:08):
Well, that's right. So you start with the question are
their minor children? If there are minor children, then you
need to provide for a guardian, and you need to
provide for a trustee to manage money until whatever age
you think is appropriate. When those children get older, it's
time to revisit that because you may want to include
your children in different ways. For example, when my wife
(05:30):
and I got a little older and our kids were grown,
we revised our will to name our sons as the executor.
So my wife, of course is my primary executor, but
if she's not around, then my children. I have two
sons and I've named them in birth order. They're each
capable of doing this job. The money goes to them,
and so the point is that I've worked them into
(05:51):
key roles. Both of them now hold power of attorney,
living will, power of attorney for healthcare, all the documentation
we talk about on the show all the time. I
work my children into those roles when they became adults.
Speaker 2 (06:05):
It's a testament to changes over time and the importance
of updating your estate planning documents. And that's a great one.
I have a minor daughter, and you know, she's nine
years old, and obviously as she grows up will probably
make some changes just like you have, so, you know,
pivoting a little bit. Obviously, there's other life changes that
might not be quite as great as a child growing
(06:27):
older and witnessing that divorce death of a spouse. Obviously,
you know, if something like this happens, some very important
changes that we would likely need to make as well.
Speaker 3 (06:39):
Well. That's certainly true. When the first thing that comes
to mind is that if I have a will that
leads everything to my wife she predeceases me, I need
to go back and check that will because she's no
longer going to live outlive me. I need to be
sure that I've made the provisions that are appropriate for
the next level. I need to be sure the executor
that I nominate is appropriate, the power of attorney is appropriate.
(07:01):
All those things need to be updated in the event
of divorce or death of a spouse.
Speaker 1 (07:07):
Well, I think you know from the divorce standpoint mark
as you know, I'm someone who went through that, and
you know, the first time around when I was married
and you're thinking through a state planning feels really different
than when you go through it in your divorce and
you're thinking about, Okay, this is what I've now have,
and I want to make sure that my children and
(07:27):
you're thinking through all of those things. So it's interesting
how just depending on where you are and what's happened
in your life, you think very differently about estate planning.
Speaker 3 (07:37):
And you should and that's appropriate, and so that's why
you should be revisited at least with each major life change.
But I'm a great believer in revisiting this every five
or ten years. Whether there's a significant we've not talked about,
is significant changes in your assets, you inherit a significant
amount of money, it may have a big impact on
(07:58):
your state plan. It may expose you to a state
taxes in a way that could be avoided. It may
change the way you want to leave your money to
your children. Perhaps put it in trust, perhaps put a
provision for grandchildren, Perhaps make some charitable gifts to your
favorite university or your favorite church, or whatever it may be.
Speaker 1 (08:16):
Yeah, I think there's just a lot to think through
here in regardless of your age or stage. If you've
got a four to one k or a home or cars,
you have an estate. It doesn't necessarily need to be
a tree lined, gated situation that you think of an estate.
And for those of you who still have this on
your to do list, please bump this up a little higher, right.
It's a big deal to make sure that you have
(08:38):
this taken care of. It's an act of love, a
labor of love to your family. Great insights as always
from our Grekman, our state planning expert from the law
firm of Wood and Lamping. You're listening to Simply Money
presented by all Worth Financial here on fifty five KRC,
the talk station
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!