Estate plans do not last forever

| Oct 2, 2019 | Estate Tax |

Estate planning is not always easy in Georgia. While some people may have complicated assets, others might need to ensure heirs get their share of an inheritance. However, one problem is more universal. In general, estate plans are often not updated when they need to be.

During a conference for the 45th Annual Notre Dame Tax & Estate Planning Institute, financial advisers frequently reported that clients did not keep up to date with estate planning. This could be due to a misconception that no changes are ever necessary. However, there are many events that could warrant revisiting wills, trusts and other estate planning documents.

An estate plan may need to be changed when a birth or death occurs or when a grantor or heir gets married or divorced. Updates could also be warranted when a grantor changes jobs, moves to a different state or switches life insurance policies.

Changes to tax laws and state laws might also impact estate plans. For example, the 2017 tax reform act eliminated itemized deductions for individuals and increased the estate tax exemption.

In the past, credit shelter trusts were used frequently in estate planning. Married couples used these trusts to provide estate tax exemptions if one spouse died. Due to higher exemptions, these trusts may no longer offer estate tax savings.

Trusts are helpful for a variety of reasons when it comes to estate planning. A trust may be used to avoid the probate process or for tax planning purposes. However, any intended benefits may be lost if estate planning documents are out of date or invalid. When reviewing an estate plan, one may need to meet with a financial adviser or estate planning attorney who will be aware of any applicable laws.