Updating Your Estate Plan for the New Year

February 5, 2025  |  William F. Huefner

The new year is the perfect time to reflect on the last 12 months and set new goals for the future. This also makes it an ideal time to update your estate plan. Much can change in a year, and your estate planning documents should reflect your current circumstances. Keep reading to learn some common life changes that may warrant updating your estate plan.

Life Changes that May Affect Your Estate Plan

• Marriage or divorce: Many people appoint their spouse as a beneficiary, executor, or trustee. If your marital status changes, you should update your estate plan to reflect this.
• A new child or grandchild: You may wish to add a new family member as a beneficiary or set aside assets for them in a trust. Your Last Will and Testament should also include guardianship provisions for your minor children or dependents in the event that you pass away.
• The loss of a beneficiary: Losing a loved one is a tragedy, especially when it’s someone to whom you planned to bequeath your legacy. Updating your estate plan to reflect this loss is a heartbreaking but necessary step.
• A change in trustees or executors: Life moves quickly, and people’s health and priorities can change. Take some time to review the people you have nominated to care for your estate or make decisions for you. Are they still willing and able, and are they still your preferred choices?
• A change in your finances: A change in income, investments, or other assets may prompt you to reassess your planned distribution of them. This is especially important for minimizing estate taxes and ensuring your beneficiaries receive the assets you intend for them.
• Relocation: Different states have different laws regarding estates. If you moved in the last year, you should consult with an experienced attorney in your state to make sure your estate plan complies with state laws.
• Medical changes: A new diagnosis or change to your health may warrant a reassessment of documents such as an advance healthcare directive or healthcare proxy.

Additional Steps to Take

Even if you didn’t experience any significant life changes last year, you can still take this opportunity to reevaluate and improve your estate plan.

• Create a trust: Creating a trust is one of the best ways to ensure an efficient transfer of assets to a beneficiary. Assets passed through trusts do not need to go through probate court, making for a faster and simpler transfer. A trust gives you more control over who receives your assets and how they receive them by allowing you to include specific instructions. A trust also cannot be contested in court like wills can, minimizing potential conflict. Certain types of trusts can also reduce estate or gift taxes.
• Plan for estate taxes: Trusts are just one way to minimize the tax burden on your beneficiaries. You can also give gifts to loved ones or charities, which are often not taxable but potentially reduce the value of your estate, lowering the taxes owed on it upon your death.
• Speak with your loved ones: Putting your wishes in writing is essential, but communicating them to your loved ones verbally can prevent confusion and conflict after you pass. A clear understanding of your final wishes will make that difficult time a little easier for them.

Contact Barna, Guzy & Steffen

If you have questions or need help updating your estate plan, please contact the trusted estate planning attorneys at Barna, Guzy & Steffen. Whether you’ve never created an estate plan before, need to make updates, or simply want to reevaluate your documents, we are happy to help.

Contact us today!