Advice for Updating Your Estate Plan

An estate plan has three objectives: preservation of wealth; designating an executor, the person or entity who will make medical and financial decisions on your behalf if you are unable; and designating who will receive your assets after death. Over time, your feelings about these objectives may change. You may want to name a new executor or health care agent, or you may rethink how you want your wealth distributed.

Throughout your life, your health, wealth and outlook on life may change profoundly resulting in the need to reevaluate your estate plan every ten to twenty years. The key is to recognize the life events that may call for an update.

A number of reasons play a role in reviewing your estate plan. These situations include: your marriage or divorce or a family member’s marriage or divorce; a loss or serious illness within your family; a substantial change in your net worth; a family member has become physically or financially dependent on you; a large inheritance; a change of heart as to how you would like your wealth distributed after your death; if your executor or beneficiaries change their mind about their roles; your retirement; a move to another state; or if you have bought or sold real estate. Any one of these scenarios is cause for review of your estate plan.

Reviewing your estate plan may seem daunting, but Kendall Capital is here to help. We suggest three steps you can follow to make the estate plan review go smoothly. The first step in revising an estate plan is to update essential documents which includes your will or your trust, your financial power of attorney and health care proxy. Review all the names: your executor; your trustee; your health care agent. Changes in your personal (and even your business) relationships may call for alterations to those choices.

The second step is to review your risk management. Does language in your will need revision? Does a trust created years ago need to be modified or replaced? Do new estate planning vehicles need to enter the picture in order to help you adequately transfer wealth, counter estate taxes, or endow charities?

What about your life insurance? Do beneficiary forms of life insurance policies or retirement accounts need updating? Is corporate-owned life insurance coverage you once counted on now absent? Will policy payouts be sufficient enough to help your loved ones address financial issues after your death?

The third step is to make sure your assets are in sync with your plan. For example, if you have a revocable trust, have you transferred ownership of all the assets that are supposed to go into it? Have you acquired new assets that need to be “poured in?”

If you are married and it appears certain that your estate will be taxed, you may want to own some assets and have your spouse own others. Yes, the federal estate tax exemption is portable, so any unused estate tax and gift tax exemption is allowed to pass to a surviving spouse. At the state level, though, there are different rules. So if all assets are in your spouse’s name and your home state levies an estate tax, that scenario may mean higher estate taxes for your heirs than if those assets were alternately owned by either you or your spouse.

It is important to review your plan every five years or so. While your life may be uneventful over five years, tax law, the financial markets, and business climates may change significantly. Those kinds of shifts can impact your estate planning strategy. If you have any questions or would like help getting started with your estate plan, call Kendall Capital today.  


Kendall Capital is a wealth management firm providing estate planning in Montgomery County, MD to individuals and families with assets of more than $500,000.