Top 10 Reasons you need to Review your Estate Plan
Marriage A “spousal right” is an entitlement for a spouse to inherit property from the other spouse. In Maryland, the rule of law called the elective share gives the surviving spouse a fixed amount of the deceased spouse’s estate based on a formula. As of October 1, 2020, the expanded statute allows a spouse to elect against a larger portion of assets extending to non-probate assets. It is important to evaluate your estate plan in light of the new situation and your goals for the distribution of your estate.
Divorce When you divorce in Maryland, your ex-spouse is removed from a priority position as your agent or trustee in your estate planning documents. If you do not want your ex-spouse to inherit certain assets, you will need to update beneficiary designations. If you have a joint trust, you may need to revoke the document and create separate estate plans.
Birth The addition of a new family member, either a child or a grandchild, may change your estate plan. If the document was not written to include future grandchildren in a class of individuals, you may disinherit a grandchild unintentionally.
Illness If you or your spouse becomes seriously ill, you may need to change course and embark on a different strategy of protecting assets. Or, if a beneficiary is now receiving government benefits, you may want to leave an inheritance to them in a special needs trust that will not disqualify him or her from receiving the much-needed benefits.
Change in Relationship During the course of time, feelings and circumstances might change. A beloved daughter-in-law may have a falling out with the family and you may no longer wish to include her in your estate plan. Perhaps, one child faces unexpected economic hardship and you start considering an unequal distribution of your estate to assist him or her.
Change in Tax Laws Documents are drafted to provide flexibility for changing tax provisions. Sometimes, the documents need to be updated to reflect the new tax law. As we all know, the tax rules are constantly changing. It is worth your while to review your documents with an attorney to ensure you have the most current plan in place.
Change in Non-Tax Law In 2010, the Power of Attorney law was changed to include a new Statutory document. There have been periodic substantive updates that may benefit your family by having the most up to date legal documents available.
Inheritance Receiving an inheritance may impact your taxable gross estate. Perhaps, your documents were not written to include estate tax provisions but with the increased value to your estate, you may need to include tax provisions now.
Change in Assets A significant change in the make up of your estate may have implications that were not considered during initial drafting. Perhaps, you inherited a business and now need to consider business succession planning. Or if your estate decreased, you may want to change specific distributions of cash bequests.
Change in Residence States often have reciprocity with estate planning documents when moving from one state to another. However, with different estate tax laws and the new statutory power of attorney documents, you may need to review the documents with an attorney in the state where you now reside.
Contact Council Baradel's Maryland Estate Planning Attorneys to get started on updating your estate plan.