Estate planning has changed significantly over the last 30 years. 30 years ago most people who had some success in life could look forward to a day when they would have a taxable estate. Paying taxes was socially deplorable, almost irresponsible to steal from your heirs just to give the money to the government. Lots of lawyers made lots of money drafting Trusts for clients so that they could “avoid probate” and minimize taxes.
The climate has changed. Most states have simplified probate processes for small and medium sized estates. While some states do still tax estates, or inheritance, many do not. For most, the current estate tax requires such a large estate that there is no tax impact. The estate tax has been replaced by the costs long term care. The system requires spending the inheritance the kids would have gotten rather than taxing it.
What all of this adds up to is that estate plans that are decades old need to be re-visited. Protections that were thought to be acquired through careful pre-planning may no longer render any benefit. Moreover, many people who established irrevocable or revocable trusts when they were in vogue (25 years ago it was considered malpractice to fail to recommend a trust in lieu of a will) have so utterly disregarded the terms of those instruments that they are little more than shells.
Anyone with an estate plan older than 10 years should have it reviewed. Anyone who has crossed a major threshold in life like marriage, divorce, death of a relative, empty nesting, retirement, major illness, moving, acquiring real estate, should have their estate plan reviewed. As with everything in life, proper maintenance will keep your estate plan in good running order. Neglect will cause significant degradation and sow the seeds of future discontent.
This article is written by an attorney at Wyatt & Mirabella, PC. Always consult an attorney before making any legal decisions. To make an appointment today for a free consultation, please click here to contact us.