Local

Avoid probate and check estate plans often – San Bernardino Sun

Executing your legacy plan should never be a “once and done” task. Estate planning is an ongoing process and should be viewed that way.

Why? Because lives change, families change, and so do laws.

Every 3 to 5 years

As a general guideline, be sure to review your estate planning documents at least every three to five years. A lot can happen in that timeframe, and it’s worth noting that we have national elections every four years that seem to affect estate tax law as well. So what should you look for. Who named you?

An important part of estate planning is naming the parties who will serve in different roles when you can’t – successor trustee, executor, power of attorney and care representative health. Are the people you named still the ones you chose? Did they move? Passed away? Are they still capable and willing to serve in the capacity you have assigned to them? Is there a better option now?

Have you named a guardian for your minor child yet? If your child is still a minor, are those still the people you choose?

Are your beliefs in line with today’s law?

I still see a lot of long-married couples’ tax-free estates trusts with a provision that requires dividing the trust into two shares at first death. We used to do this for estate tax purposes – in short, to use the couple’s estate tax exemptions. However, in 2011 the law changed, and we now have the ability for a surviving spouse to reserve the deceased spouse’s estate tax exemption for future use without paying the cost and hassle of dividing assets into two separate trusts.

There can still be reasons for two (or sometimes three) trusts to split – children from different marriages, different beneficiaries, separate assets and/or a large estate – but it’s best to have your attorney review the trust to determine if the formula in your trust still works for your situation. I have yet to meet a living spouse who is happy to learn that they now need to appraise all of their assets and split them in half.

Does your trust speak for what you want?

Sometimes the trust is drafted in some cases, things get better (or worse), and the trust is never updated. You may have left your assets to beneficiaries upon your death, and now someone has a substance abuse problem, or someone is getting divorced, or you have seen how they handled their assets. inheritance from another parent or grandparent and “absolutely” doesn’t seem like a good idea anymore.

The reverse can also be true — you leave the beneficiary’s share in the trust until the person is 35 years old or maybe older. But now the main beneficiary is an adult, responsible for their own children. Is a trust still necessary?

Again, there can be many reasons for a beneficiary’s trust (maintaining separate status, protecting assets, estate tax planning, maturity, and others). Just be sure to check in from time to time to see if your trust meets your goals and current circumstances.

Is the beneficiary designation current?

Annuities, life insurance, IRAs, and retirement plans are controlled by the beneficiary’s designation. That means no matter what you said in your will or trust, those assets will be distributed to the person(s) named on your beneficiary designation form. And I’ve seen this wrong too many times.

I am currently dealing with the trustee and executor of an estate that will encounter unnecessary probate. Her husband passed away many years ago. At the time of the husband’s death, the financial planner asked the wife to transfer her husband’s IRA to her own IRA. However, the financial planner did not ask the wife to fill out the new beneficiary designation form.

The wife’s existing beneficiary designation (from 15 years ago) only names her now deceased husband as the beneficiary. No random beneficiaries have been named and no new forms have been completed.

As a result, when the wife dies, the “default beneficiary” of the IRA, with more than half a million dollars in it, is the “legacy.” That means the IRA has to go through an expensive and time-consuming probate process just to reach the living trust thanks to an inherited will (a will that says “I entrust everything to your trust.” me”). An updated form could have saved more than $20,000 in legal and enforcement fees.

Likewise, I have seen beneficiaries designated with the ex-spouse still named, first-born children named but not named for subsequent children, and all frequently. , a mother is named a decade or more before the insured gets married. (Moms are named more often than dads – don’t ask me why.) And I’ve seen beneficiary forms get lost by the organization that supposedly maintains them, and the forms are never completed. , or worse, completed but never delivered to the financial institution. The simple review of documents will save the heirs a lot of time and money.

Worth the time

I know it’s tempting to pat myself on the back for finishing my wealth-building plan and then stick the stacked file in a drawer somewhere and forget about it. Just remember to pull that cover out every few years and check with your attorney. Time changes everything.

Teresa J. Rhyne is an attorney practicing estate planning and trust management in Riverside and Paso Robles, CA. She is also the New York Times #1 bestselling author of “The Dog Lived (and I Will)” and “Poppy in The Wild.” You can contact her at Teresa@trlawgroup.net

https://www.sbsun.com/2022/02/06/avoid-probate-and-audit-an-estate-plan-regularly/ Avoid probate and check estate plans often – San Bernardino Sun

Tom Vazquez

USTimeToday is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@ustimetoday.com. The content will be deleted within 24 hours.

Related Articles

Back to top button