How to Review Your Estate Plan

by Matthew Karr, Esq. on September 5, 2011

I recently met with a Massachusetts estate planning client whose situation reinforced in my mind the need for regular estate plan reviews. This client had had a friend of his, an attorney but not one specializing in estate planning, draft basic wills for him and his wife decades ago. They signed them, stuck them in a drawer and forgot all about them. Sound familiar?

Now, years later, he came to me because his wife is having health problems and may need nursing care in the near future. He wanted to know his options. I looked at his estate planning documents and immediately recognized that they had not done any trust planning.

Unfortunately, because of MassHealth’s five year look-back period for transfers, even if we set up a trust today it would not help with wife qualify for Medicaid benefits unless she could wait five years before needing care. This was obviously not an option for them.

I also looked at their distribution plan and asked about some of the beneficiaries. Well, this couple was quite advanced in years and several of the people they named in the will have predeceased them. When this happens the gift fails and, without further planning, is distributed according to intestacy as if they had no will at all!

After explaining all of this to him he seemed in disbelief. Why, he asked, had his friend not set them up a trust all those years ago? I answered that most likely he never considered planning for long-term care at that time because they were too young and the possibility of nursing care was too remote. People and conditions change, and to keep your estate plan effective it must be reviewed and updated regularly. Here’s how:

1. Make it a point to review your estate planning documents annually or at least every two years. It might help to keep your documents with your tax information so every April you will be reminded.

2. Look at who your beneficiaries are. Does your plan of distribution still make sense? If not, the will should be amended.

3. Consider your life stage. An estate plan for a young parent should be markedly different from a person in middle age and a person in retirement. Each life stage has different opportunities and challenges. Your estate plan must adapt in order to be effective.

4. Take stock of your assets. Does your estate plan reflect the changes in what you own? An estate plan that doesn’t keep pace with your financial growth can mean damaging tax consequences and unprotected assets.

5. Remember to plan ahead. It’s always best to plan for life’s changes before they are right upon us. That’s especially true for seniors considering their future long-term care needs. To fully protect assets from the enormous cost of nursing care, you need at least a five year head start.

Just like people, the laws change over time and you need to stay updated in order create a plan that is right for your family. If you have questions about your estate plan or if you know your plan needs updating, call the Heritage Law Center for a free consultation.

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