Estate Plan Check-up

Just as you should periodically review your investments to determine if they are meeting your current objectives, you should periodically have your estate plan and the related estate planning documents reviewed

If you haven’t had your estate planning documents reviewed recently, perhaps it is time for a check-up.  In our practice, we find that estate plans need to be reviewed or modified for the following reasons:

  1. Changes in circumstances of beneficiaries – Many people experience changes in their family circumstances since their estate planning documents were drafted.  Often the beneficiaries selected and/or the manner in which they have been provided do not meet with current objectives. Children and grandchildren are born and sometimes die.  Marriages, divorces, and various changes in the physical or mental capacities of beneficiaries occur.  Relationships deteriorate or improve causing changes in the amounts to be provided.  Sometimes it is desired to provide greater flexibility to a beneficiary (e.g. giving a spouse a special power of appointment in a trust).  Conversely, it may be desirable to impose greater restrictions (e.g. in a second marriage).  Finally, some beneficiaries may be vulnerable to being sued to cause concerns about creditor protection.
  2. Changes in the selection of fiduciaries  – Sometimes the people selected to carry out the terms of a will or trust are no longer logical choices.  Some children grow up and become mature enough to handle such responsibilities.  Others clearly prove themselves to be quite incapable in this regard.  People move and it becomes impractical to have them act.  Conflicts between the fiduciaries and the beneficiaries arise.  Children fight among themselves or with a step-parent.  Sometimes the estate plan has become more sophisticated and requires a fiduciary with greater expertise (e.g. a bank or trust company). 
  3. Changes in the law – In certain cases, changes in the laws, particularly the tax laws, make it advisable to update or modify one’s estate planning documents. Also, many people move here from other states and fail to have their documents modified to comply with Florida law. For example, in late 2011, the Florida legislature completely overhauled the statute relating to Durable Powers of Attorney documents by creating  “ The Florida Power of Attorney Act” (Florida Statute 709). As a result, many Power of Attorney documents should be reviewed and updated. For practical purposes, it may make sense to update these documents as the financial institutions that may rely on these documents may be more comfortable and quicker in accepting documents executed in conformity with the new law.  In prior years the statutes relating to Living Wills and Designation of Health Care Surrogate documents were modified.
  4. Federal Estate and Generation – Skipping Taxes and Changes to the Internal Revenue Code: Many people with assets in excess of the tax exemptions fail to properly plan to reduce, eliminate or anticipate their federal and/or state estate tax exposure.  Most commonly, married couples fail to provide bypass trusts for each other to take advantage of their combined unified estate tax exemptions.  Others seek to take advantage of more advanced strategies such as Irrevocable Life Insurance Trusts (ILITs), Qualified Personal Residence Trusts (QPRTs), Crummey Gift Trusts,  and Intentionally Defective Grantor Gift Trusts (IDGTs).  For those charitably inclined, let’s not forget about charitable remainder and charitable lead trusts. Note – Due to Congress’ inability to come to a permanent solution on the estate tax, the tax laws establishing the amount of the exemptions, the rate of tax, and the recent reunification with the gift and generation-skipping tax exemptions, has been in a state of complete flux. A recent concept referred to “portability” was introduced into the law in 2011. The rules relating to portability could make estate planning in certain circumstances significantly easier, but all these rules could drastically change in the near future. Thus, depending on the size of your estate,  it can be very important to have your estate plan reviewed on a regular basis. 
  5. Avoidance of Probate – It seems like everyone today wants to avoid probate, but not everyone does it successfully.  Many people establish living trusts with this intent but fail to avoid probate because they have not properly retitled their assets into their living trusts.  Others devise their own probate avoidance plan by creating joint tenancies and utilizing other pay-on-death methods.  Unfortunately, some of these people leave themselves with problems much greater than probate; assets can pass in an unintended manner, estate tax burdens and other liabilities can be shifted or caused and consequently, the intended estate plan fails.
  6. Special Assets – Certain assets require careful attention. The beneficiary designations on life insurance policies, annuities, pension plans, and IRAs need to be coordinated with the entire estate plan.  Numerous issues regarding real estate, especially when it is located outside of Florida, may need to be addressed.  Interests in family businesses usually can also raise a multitude of issues.
  7. Incapacity and Terminal Conditions – Everyone should try to plan for the possibility of becoming incapacitated or becoming terminally ill.  Consideration of Durable Powers of Attorney and Living Wills is usually appropriate.          

Most importantly, seek professional help with expertise in this field.  If you had a heart problem, you’d go to a cardiologist rather than a general practitioner.  Certainly, you wouldn’t treat yourself.  Seek an attorney that specializes in estate planning.   

Mark has been practicing law in Boca Raton for over 25 years.  He is Board Certified in Wills, Trusts and Estate law and is also a CPA.  His office address is 1801 N Military Trail, Suite 203, Boca Raton.  He can be reached at or 561-750-7575.