Diamonds are forever! Estate planning is not!
The travails of the James Brown (Godfather of Soul) estate show just how bad things can get when estate planning documents are not updated when there are changed circumstances. Brown didn’t update his estate planning after a late in life marriage, nor after his last child was born. The result is five years of probate litigation – and still counting! For a detailed analysis, take a look at this Forbes article: Court Battles and Debt Leave James Brown Estate Not Feeling Good.
As we have discussed in previous posts, beneficiary designations are often the most overlooked changes that need to be made when life intervenes. As recently as yesterday, a client needed a “reminder” that his retirement plan and life insurance beneficiary designations had not been changed to coordinate with his estate planning documents, as a result of his second marriage.
Additionally, this same client came to the realization during our review of his planning that his now 77 year old brother may not be around to act as successor co-trustee with his new wife. So we are amending his revocable living trust to add a successor co-trustee to act if his brother is unable, or unwilling, to act in that capacity.
A new marriage or an aging fiduciary are but two of many reasons that estate planning, and estate planning documents, should be periodically reviewed and updated when appropriate. Sometimes changes in the law either necessitate or suggest estate planning changes – such as Florida’s new power of attorney statute.
We provide our clients with the following “Annual Review Checklist” to help remind thiem of the need for periodic review of their estate planning and estate planning documents. Basically, if you answer yes to any of the following questions, it suggests a need to review your estate planning.
ANNUAL REVIEW CHECKLIST
Below you will find a number of questions. A positive answer to any of them may indicate a need to review your estate plan. Check the appropriate boxes. Call our office to set up an appointment to discuss how any of the changed circumstances may affect your existing planning.
I would like to make specific bequests to individuals not presently included in my plans – or delete the names of one or more
Persons (or charities) currently named.
I would like to change the amounts of some of the bequests I have made.
CHANGES IN VALUATION
The value of my estate has changed more than 5 percent since the last review of my estate plan.
SPECIAL PROVISIONS FOR CHILDREN
My health (my spouse’s or children’s health) has deteriorated substantially in the last year.
NEWLY BORN OR ADOPTED CHILDREN
A child (grandchild) has been born (or adopted) since our last review.
HANDICAPPED OR INCOMPETENT CHILDREN
A child (grandchild or other dependent) has become handicapped or seriously injured since or last review.
STATUS OF FAMILY MARRIAGES
A member of the family has become divorced or separated since our last review.
CANCELLATION OF LOANS TO CHILDREN AND EQUALIZATION OF INHERITANCE
I would like to discharge an obligation owed to me by cancelling the loan in my will.
I would like to provide a clause to equalize any gifts made in the past (or to be made in the future) to certain children (Grandchildren).
I have added (or dropped) more than 100,000 of life insurance since our last review.
I have (or would like to) change a beneficiary designation on an existing policy.
I feel I may need more life insurance but I don’t know how much to purchase or what type to consider.
GIFTS TO MINORS
I would like to make some substantial gifts to minor children (grandchildren).
GIFTS TO CHARITIES
I would like to add (delete) one or more charitable beneficiaries.
I would like to change the amount of my bequest to certain charities.
I have entered into stock (LLC, partnership) buy-sell agreement since our last review.
My business situation has changed significantly since our last review.
GUARDIAN, PERSONAL REPRESENTATIVES AND TRUSTEES
I would like to name a particular person as advisor to my executor and trustees.
I would like to reconsider the designation of the guardians, personal representative and trustee I have named.
I would like to review my estate plans for the following reasons.
I’d like to know how the latest tax law affects my estate plan.
If, in your review of this checklist you see statements that apply to you, you may want to schedule an appointment with your estate planning lawyer to update your estate plan, and your estate planning documents.
Copyright 2008-2014 – The Coleman Law Firm, PLLC