As time passes and family dynamics change, it is important to review your estate planning documents every few years to ensure the plan that you have in place is still applicable. This is particularly important after any major life event, including marriage, divorce, a birth, or death.
However, as life happens, reviewing your estate planning documents gets put aside. However, a definite marker to indicate a need to update your estate planning documents is if you are married and your Trust and Will was prepared in 2012 or before. This is because before 2012 the standard estate plan for married couples was a forced A-B Trust split, to maximize estate tax savings. However, with the enactment of portability and the estate tax threshold increasing to currently be $11.4 Million per person ($22.8 Million for a married couple), these forced A-B Trust splits can actually be more harmful than helpful. A forced trust can prevent a step up in basis at the second spouse’s death, leading to capital gains taxes in the future. Further, the forced trusts can be cumbersome to administer when it is no longer needed.
If you signed your Trust before 2012, call our office to schedule a free consultation to review your estate planning documents and determine if changes need to be made.