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Estate plan checkup

It's Your Money

Posted: December 24, 2008 5:38 p.m.
Updated: December 25, 2008 4:55 a.m.
The beginning of the new year is an excellent time to sit down with a professional to review your entire estate plan, including your trust, will, power of attorney, health-care directive, community property agreement and other documents intended to make sure your assets and personal needs will be managed according to your wishes. If it's been longer than a year, you're probably overdue for an estate-planning checkup.

In a prior article, I discussed some of the persistent myths about estate planning. One such myth is that estate planning is a one-time event. This is far from the truth. You may have taken into account all of the necessary factors when you set up your plan, but if circumstances have changed since your estate plan was created, it may need to be updated to make sure the plan continues to carry out your wishes. Below, I list some of the events that may trigger the need to review your current plan.

* Changes in your assets. Acquiring different types of assets as well as increases or decreases 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 Estate plans can become outdated or less effective even if your personal circumstances have not changed due to changes in the law.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. You should be reviewing beneficiary designations as well as the designations of the people you have chosen to handle your estate or make health-care decisions for you.

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

The list of events, 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 will help to ensure your plan continues to accomplish your goals in the manner you intended. Only attorneys who 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 your wishes will be carried out.

Randall D. Armour is an estate-planning attorney and licensed real-estate broker. "It's Your Money" appears Thursdays and rotates between a handful of the valley's financial professionals. His column represents his own views and not necessarily those of The Signal.


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