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Randall D. Armour: Give estate plans an annual checkup

It's Your Money

Posted: July 1, 2010 4:55 a.m.
Updated: July 1, 2010 4:55 a.m.

When was the last time you sat down with someone to review your trust, will, power of attorney, health care directive, community property agreement and other documents intended to ensure your assets will be managed and distributed according to your wishes?

If it has been longer than a year, you are probably overdue for an estate planning checkup.

In a previous column, I discussed some of the persistent myths about estate planning. One such myth is that estate planning is a one-time event. This, however, is far from the truth.

You may have taken into account all of the necessary factors when you set up you plan, but if circumstances have changed since your estate plan was created, it may need to be updated to make sure that the plan continues to carry out your wishes.

Below, I will discuss some of the events that may trigger the need to review your current plan.

* Changes in your assets. Acquiring different types of assets or increases in value may require planning that was not anticipated when the original plan was established. For example, as the value of your assets increases additional tax planning may be necessary.

* Changes in the law. Estate plans can become outdated or less effective even if your personal circumstances have not changed, due to changes in the law. Recent tax-law changes have had a dramatic impact on how estates are planned, and changes in the health care privacy laws have made it extremely difficult for family members to care for loved ones without the proper documents.

* Changes in family circumstances or relationships. Events such as births, deaths, marriages and divorces all can have significant impacts on an estate plan. The way you feel about those people whom you have appointed to handle your estate or make health care decisions for you may change.

* Changes in your goals or desires. Most people will experience many changes in their goals and desires throughout their lives. It is very important that your estate plan reflects those changes.

The list of events, both financial and nonfinancial, that can trigger the need for an update of your estate plan is endless. An annual review of your estate plan by a qualified estate planning attorney is essential for guaranteeing that it continues to accomplish your goals in the manner you intended.

Only attorneys that focus their practices on estate planning have the resources and requisite experience to provide you with the advice and expertise you need to make certain that your wishes will be carried out.

Randall D. Armour is an estate planning attorney and licensed real estate broker. He can be contacted at (661) 259-0003 or visit "It's Your Money" appears Thursdays and rotates between a handful of the valley's financial professionals. His column reflects his own views and not necessarily those of The Signal.


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