Life Events

The Importance of Keeping Your Will and Trust Up-To-Date

by
Bob Mason
on
11/17/2019
The Importance of Keeping Your Will and Trust Up-To-Date

Having a will in place is essential to ensuring that your goals regarding your legacy and the disposition of your assets are carried out. But creating a will is not a one-and-done process: you should think of your will as a living document that needs to be revisited and revised in response to both changes in the tax laws and changes in personal circumstances that affect either you or your beneficiaries.

If you wrote your will or set up a trust prior to the passage of the most recent tax law change, the Tax Cuts and Jobs Act, you’ll want to revisit it as soon as possible as the TCJA more than doubled the amount that can be exempted from estate taxes. Where the threshold for exemption was once roughly $5.5 million, the new law made a significant change: For example, the estates of those who die in the year 2020 will benefit from an estate tax exemption of just over $11.5 million, and that number is slated to be adjusted for inflation annually. This means that anybody who premised their estate planning and will on the previous $5.5 million figure may need to go back and make changes.

This is just one example of how the world around you can impact the best-laid plans. In addition to changes in the laws, changes in personal circumstances can also require shifts in your will and other asset distribution instruments. All it takes is a birth, a death or a divorce to spur a change to these important documents, though the flurry of activity that surrounds these types of events can make it easy for the necessity to slip your mind.

Consider the following potential life events and how they might impact what you currently have in place:

  • Your divorce, separation or marriage
  • Your beneficiary’s divorce, separation or marriage
  • Relocation to another state
  • Birth or adoption of children or grandchildren
  • Minor children aging into adults and being able to handle their own financial matters
  • A significant change in assets or asset value
  • A change in your personal representative (executor, trustee)
  • A shift in who you want included among your heirs
  • A change in your health status
  • A change in estate tax laws

To make sure that your will is a proper reflection of your wishes, mark down a review on your calendar each year around tax time. You may also want to discuss the various tax implications of your decisions with a tax professional. Failing to review these documents consistently can leave your estate plans subject to instructions that you would no longer want in place when it’s already too late to make a change.

Bob Mason, CPA writes for TaxBuzz, a tax and accounting news and advice website. Reach his office at [email protected].  

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Bob Mason

Bob Mason

Bob Mason is the founder of Coast Financial Services Inc. servicing both the Santa Cruz, and San Jose areas. Bob Mason is a skilled financial professional who is fully equipped to assist any of your accounting needs. Founding his firm in Santa Cruz, Bob understands the importance of small businesses and how they form the backbone of the area. Coast Financial Services, Inc. has been dedicated to the growth and profitability of businesses in Santa Cruz for 17 years. To learn more about Bob Mason and the rest of his team, visit their website.

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