What Are Some Life Events That Would Prompt People To Revise Their Estate Plan?

There are several life events that would prompt someone to revise their estate plane. One of the most common that we see in the Washington DC metropolitan area is people moving from another state into our area. Under a constitutional law there is supposed to be reciprocity between the states and in Virginia we generally will respect documents that are properly prepared from a different state. However, there are practical issues at play here; particularly with power of attorney and medical directives where, even though the document may be technically valid, it may not look akin to what the documents commonly look like in Virginia.

Our advice is that even though the document from someone who lived somewhere else at the time was validly done, it’s worth the investment to rewrite them if they’re now living in Virginia. This way it won’t cause any controversy once it’s presented to financial institutions, hospitals, or doctors. Again, a theme that’s important about estate planning documents is to do what can be done to make sure they’re honored at the time they need to be used.

Second to that is, other than a regular review checkup, is a death has occurred in the family, a medical issue that’s arisen that looks to be a substantial event, the birth of a child or a grandchild, or a change in their financial condition such as inheriting money from another family member.

We’ve represented several clients that have won state lotteries. There’s also the other side of the financial issue where assets that you had at one time aren’t there anymore. That is a reason to take a look at the extent of the planning done back at the time their finances were higher to see whether or not the planning and complexities that were provided for then stand and still make sense based on the assets that the person has now. Lastly, there’s the issue of what changes may occur in the law from one year to the next over a 3 year period.

Who Are The Necessary Parties Involved In Estate Planning?

There are several necessary parties involved in estate planning, the “players in the band” if you will. The creator of the plan is the most important. However, the other people that the creator of an estate plan needs to pay attention to and plan for depend upon what documents are comprising the plan. Every plan will have a will, thus one of the important positions that needs to be provided is the executor who’s in charge of fulfilling the instructions under the will. If the creator of the plan also has minor children then the will needs to provide for at least one and perhaps two additional people. One would be who the guardian for the child in the event that the creator died when that child was still under the age of 18. The will is the customary document in Virginia for nominating who a guardian would be to take over the custodial parental role of minor children.

We also encourage the nomination of trustee for estates with minor children. This position is necessary when the creator of the will desires to create a managed arrangement for the financial assets that they want the minor child to benefit from and what rules, if any, they are going to apply to the creation and management of that arrangement. Principally, what age that child needs to attain before that arrangement would end and the assets would be transferred to the child. That’s an important element of planning for parents of minor children because if you ignore that aspect of planning, then under state law, each child is going to get what they’re entitled to at the age of 18. Almost universally, my clients consider age 18 to be far too young an age to be expected to maturely manage assets. Depending upon what additional documents are prepared will also depend upon what additional positions need to be filled.

Aside from a will, we also recommend that our clients have a financial power of attorney. Under that document the client would be appointing an agent, a person that they would allow to access their bank accounts, pay their bills, and undertake financial and business decisions for them. The companion of that document on the personal and medical side is an advanced medical directive. Under that document the creator is appointing an agent to fulfill their medical instructions. Most clients associate that document with end of life medical instructions; when and whether to remove medical treatment if you’re at the end of your life and you’re only being kept alive artificially. That’s an important part of what those documents provide for. However, they’re more expansive than that and they also allow agents to consent to medical treatment in circumstances where the person would want the treatment but isn’t in a position to give their own consent. That’s also an important position and an important document.

There also may be additional trusts that the person may be creating for themselves or for others, in which case they would need to appoint who the trustees are which may or may not be themselves during periods when they’re capable of handling the actions and who would succeed them in circumstances when they were not. The specifics of the position to consider depends upon what documents are constructing the estate plan. But, those are some of the basic people that clients need to be thinking about and planning for.

For more information on Reviewing and Updating Your Estate Plan, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (703) 492-9955 today.