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Reviewing Your Estate Plan

The percentage of people that actually have a completed estate plan is pretty low.  I don’t know the exact number but it’s well under 50% and could easily be under 20%.  Of those 20-50% of the people who were organized enough to get your estate plan done in the first place should you review it at some point?

Well, the way it often goes is the client signs the estate plan, puts it away and forgets about it. Some people remember to put later acquired  assets into their trust but certainly not the majority of people. However, how many people have a document sitting on a shelf, collecting dust, that is simply not accurate anymore.  It may be inaccurate due to family change, asset change or changes in the law. The key is knowing when to talk to your estate planning attorney and, if in doubt, set an appointment to review things!

Times in life when you should review your estate plan:

– Changes in the law;

– New Marriage;

– Divorce;

– Kids or grandkids are born;

– Assets change drastically (up or down);

– Serious illness;

– Change in family business plans;

– Retirement;

– Change of jobs;

– Financial irresponsibility of a child;

and the list goes on and on.

Some of these can be more major problems than others. Getting married is probably one of the biggest. Let’s say you have a will or trust that leaves 100% of your assets to your children. Let’s say you get re-married to a lovely man. He is warm and sweet, loves your kids, puts a roof over your head and on and on the list goes of great attributes that this man has.  Then you die. Do your kids still get 100% of your will or trust?  Let’s say it was 100% “separate property” that you acquired years before marriage and you never co-mingled the assets with community property.  Still? Do your kids still get 100% of the assets?  What if you died on the honeymoon?  Still?  Do you still think your kids will get 100% of your assets?

The laws in California are very clear that your husband is a “pretermitted spouse.”  Simply put this means your hubbie can make a claim against your estate for his intestate share as if you had no will or trust!  If you have 2 or more kids that means he could make a claim for 33% of YOUR assets and if you only have 1 child he could go after HALF.  Let me say that again… HALF!

On the other hand you could revise your will and trust just before marriage to say you are contemplating marriage and still intend to give your children 100% of the assets.  Then you would do an amendment immediately after marrage stating you are now married but you still wish to give all (or whatever amount you decide) to your children.  By preparing proper, legally binding, amendments to your estate plan you have reviewed your estate plan and avoided the Gov-enator changing your estate plan for you!

This is just an example. I have more!

I encourage you to contact your estate planning attorney to review your estate plan. If you don’t have an attorney call me!

-John

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