Every October, the National Association of Estate Planners & Councils hosts an Estate Planning Awareness Week. The purpose is to help educate the public about the importance of planning for the future, and for one’s family after his or her death. This is particularly relevant for Baby Boomers, as more than 10,000 members of the Boomer generation turn 65 years of age every day.
Did you know the NAEPC estimates that over half of Americans, or 56 percent,
either do not have an estate plan, or have a plan that is out-of-date?
This means there is no guarantee that your property can be transferred to loved ones as intended, the legacy you want can be created, or that your end-of-life decisions will be honored.
Another drawback is the potential loss of value to your estate.
Life changes, such as marriage, divorce or births in the family, can impact your estate plan
and have tax consequences you may need to discuss with your estate planning attorney. The potential loss of value is something we take very seriously and make sure to discuss with our clients each year through our Client Maintenance Plan.
In 2017, did you know that Congress passed a sweeping tax reform, which, among other things, doubled the federal estate tax exemption? Were you also aware that fifteen states across our nation impose their own estate taxes, and six states carry a related inheritance tax, some even have both? The most common estate tax rates in these states range from 16 percent to 20 percent. Needless to say, neglecting to keep pace with how law may change, including the laws in states where you have additional property, may impact your estate and could end up leaving behind a lot less for your loved ones.
Even if you are not a Client Maintenance Plan member, it is also important for you to revisit your estate plan if the value of your estate has grown by twenty percent since you last updated it.
While this may seem like an arbitrary number, and even a one percent increase could require an update, as asset growth increases so do potential tax liabilities. Failure to update your plan could further diminish value, and without clear beneficiary designations the proceeds may exclude certain loved ones. This could create confusion among grieving relatives after you are gone, and lead to probate delays or even litigation between family members.
The good news is that Baby Boomers can avoid nearly all of these pitfalls with a sound, up-to-date plan. We encourage you not to wait to ask us your questions. We are your local law firm ready to help you create the legacy you need for yourself and your loved ones that can protect you both now and in the future.