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Most people that have accumulated considerable wealth know the importance of estate planning. Estate planning involves writing a living trust, a will, giving a healthcare directive, and assigning power of attorney.
These arrangements are important because they spell out how a person’s wealth and health are handled in case of death or diseases that render them unable to handle their financial and health matters.
A Lot Can Change in Ten Years
Circumstances change with time, meaning if you wrote your estate plan years ago, you might need to rewrite it. Take, for instance, ten years. A lot can happen; children are born; others transition from childhood to adulthood, die, or get divorced. These possible happenings call for a revision of old estate plans, preferably after every ten years.
While all the reasons mentioned above are enough to warrant a revision of an estate plan, revision of applicable laws is the main reason you may want to rewrite your estate plan after some time. Failure to update your estate plan to align with current regulations would mean the plan would be unenforceable. The last notable changes from a legal standpoint happened in the 2010s.
Most Notable Changes Since 2010
Starting in December 2010, the federal tax exemption rose from $5 million after factoring in inflation. As of 2016, the exemption rose to $5.43 million. This means if the value of your estate is anywhere below the $5.43 figure, your dependents do not have to pay federal estate or gift tax.
The other major change connected to estate planning is the 2012 American Taxpayer Relief Act which became law in 2013. This law applies to married couples with a taxable estate worth more than $5.43 million. This law provides for the transfer of a deceased spouse’s federal tax exclusion to the surviving spouse, meaning that the surviving spouse can stack the deceased spouse’s tax exclusion on top of theirs.
You Will Need to Work With a Lawyer
So, if you wrote your estate plan before December 2010, you will need to update your plan and avoid inconveniencing your beneficiaries. Updating your estate plan is something you do not want to do on your own, considering the implications it can have on your dependents if it is not professionally prepared. While you may get many websites claiming to help you with DIY legal document filings, it is best to go for a lawyer with some years of experience in estate planning.
“The lure of DIY legal help is compelling. After all, you still get the same document the lawyer would give but at a low price,” says estate planning lawyer Jennifer C. Fu of Amity Law Group LLP. The truth is DIY legal approach is only good at offering false hope. When put to the test in court, there is a high chance it may not hold, and you do not want to have your estate plan struck out by the court after you are gone.
A lawyer does more than draft a piece of document for you. Owing to their experience in helping other clients in writing their estate plans, lawyers also play the role of counseling clients before they make big decisions. Some of the most sensitive decisions a person may need to make includes selecting guardians for their children or appointing the person to have power of attorney over their property after they are gone.
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