When people move to Florida from another state, this could be one reason to review their estate plan and see if it needs updating based on the difference in state laws. However, there are a number of other reasons to review an estate plan regularly. For example, an estate plan that has been designed to avoid estate taxes may be out of date since the exemption has increased significantly.
As part of an estate plan review, people should make sure that all necessary components are in place. At minimum, there should be a will and paperwork that appoints people to manage healthcare and finances in the event of the person’s incapacity. A person might want to consider adding a codicil to the will that addresses distribution of personal effects. The person may also want to consider whether the beneficiaries or what they receive needs to be changed and if the person named as executor is still the right choice. If there is a trust and a friend or family member has been appointed as trustee, it may be worth considering whether this is too much work and responsibility. A professional may be a better choice.
Assets that have beneficiary designations, such as 401(k)s, should be reviewed along with life insurance policies. These policies may have lapsed or have other liabilities.
People who have remarried or who have children from previous relationships need to take a look at their estate plan to make sure it does not leave out any of their children or leave assets to an ex-spouse without intending to. Other changes might be necessary as well such as creating a trust. This may be useful if a person is worried about a beneficiary’s spending habits because the trust could specify when distributions are made or leave them to a trustee’s discretion. An estate planning attorney may be able to guide clients through the process of updating all relevant documents.