Out of the millions of Americans who die every year, there are far too many who have not prepared for that eventuality by creating an estate plan. For those that have taken this important step in planning for their family’s future, they often ask when they need to revise their estate plans. Let our Los Angeles estate planning attorneys give you their recommendations.
The essential estate planning tools
A will and a living trust are often considered to be the two most essential tools to include in your estate plan. They can both be used to transfer assets, but they both have their own unique purposes and benefits. For instance, wills can be used to designate a guardian for your minor children, but a living trust cannot serve that purpose. On the other hand, a living trust has advantages you can enjoy while you are still alive, unlike a will. Regardless of the goals or benefits, there are still situations where you may need to update a will or living trust. In fact, you should review your estate plan, at the very least, every five years. However, there are certain situations that require a review, regardless of the timing.
When estate planning law changes
It is always important to review your estate plan whenever applicable laws change. For example, in 2017, you could transfer up to $5.49 million in assets tax-free during your life or upon your death. However, under the new Tax Cut and Jobs Act, the estate tax exclusion amount for 2018 will increase to $10,000,000, not including the necessary inflation adjustment. So, if you do not revise your will to take into consideration this new law or any others, then your estate plan may not express your real intent in leaving your property to your family.
Significant changes in income or assets
Whether it is a great investment return or a very profitable business, you may find yourself on the receiving end of a substantial amount of income or increase in assets. With the assistance of your Los Angeles estate planning attorneys, you can transfer some of your assets before they increase in value in order to avoid the tax consequences of appreciation value.
There are also issues to consider if you experience a financial setback. There are various strategies that can be used in order to make the most of your estate, while still making sure that your family will be taken care of in the way you intend.
Changes in relationships
Our Los Angeles estate planning attorneys always recommend that, if you get married, divorced or separated, the worst thing to do is procrastinate about modifying your estate plan. The need to review and modify your estate planning tools applies not only to your will or living trust but also to any assets that would potentially transfer by some other method, like retirement accounts, life insurance, and savings bonds. Also, be sure to consider joint bank accounts and real estate.
Becoming a parent or grandparent
Although for some clients, becoming a parent is the first time they consider creating an estate plan. But if you already have a plan when your first child comes along, or if you are expecting your first grandchild, you should review your plan with your Los Angeles estate planning attorneys to see what changes need to be made. For new parents, the most important concern is naming a guardian for your children, in case they are still minors when both parents have passed away. Regardless of whether you are a parent or grandparent, it is crucial that your estate plan includes your new family member.
The death of a spouse
Most life-altering events result in the need to review your estate plan. Losing a spouse is one of these terrible events that will signal the need to review your plan with your Los Angeles estate planning attorneys. Married couples can give a gift of an unlimited amount to their spouse. The value of the property gifted to the surviving spouse is deducted from the deceased spouse’s estate. If all assets go to the surviving spouse, then no estate taxes are imposed based on the “marital deduction.” A married couple can ultimately protect twice as much in assets from federal estate and gift taxes.
Join us for a free seminar today! If you have questions regarding estate planning, trust contests, or any other trust administration issues, please contact the Schomer Law Group either online or by calling us in Los Angeles at (310) 337-7696, and in Orange County at (562) 346-3209.
#estateplanning, #schomerlawgroup, # losangelesestateplanningattorneys
Latest posts by Scott Schomer, Estate Planning Attorney (see all)
- SALT Deduction Limit…Can You Get Around It? - February 4, 2019
- What Can a Los Angeles Probate Attorney Do For You? - February 3, 2019
- 5 Great Tips for Long Beach Probate Court Administration - February 1, 2019