Get your estate plan in for service
Written by Nolan Baker Mark Clair | | letters@toledofreepress.comThere are many factors that can affect estate plans that you may not even know about. Existing plans typically reflect the current family situation, tax laws and what assets are owned at the time it was created. Situations change, laws change and, obviously, what assets are owned changes over time.
“Servicing” a plan comes to mind because it’s like owning an automobile. The automobile was purchased for a specific purpose. Nolan owns what he calls “the soccer mom” car to transport family members and travel back and forth to work. Typical considerations also factored in to the buying decision are safety, speed, economy and comfort. The DVD player was an important feature for Nolan since he has two young boys. For Mark, his vehicle of choice is a Harley Davidson. It gives him the freedom to just enjoy the ride. But he also owns a second vehicle for transporting the family around town.
Most automobile manufacturers recommend a regular schedule of service like changing the oil every 3,000 miles and going through a checklist of other things that should be maintained like tires. Most automobile owners realize that if they stick to a recommended maintenance schedule, it is more likely the car will last longer and have fewer problems.
What does this reference to servicing a car have to do with an estate plan? Like purchasing a car, there are things to consider when purchasing and maintaining an estate plan. Many people think once they have had a will or trust prepared it is done and there is no need to worry about it. In most cases, this is not true. Circumstance changes and law changes can have a negative effect. A car not maintained will likely result in problems in the future. The same is true with your estate plans.
Here are some events that may call for a review of your estate plan. First, changes in your life: perhaps, a family member named in the plan has died, or there has been a new birth, a change in health, a divorce, the purchase of different real estate, a change in business interests, a change in the amount or type of assets owned, children have become adults, or, perhaps, you have just changed your mind about who you want to leave things to, who should be a guardian to your children, etc.
Secondly, changes in the law: some recent law changes that may affect a plan are HIPAA, which has to do with the protection of privacy and release of information, law changes affecting how your retirement accounts are taxed, estate tax law changes (the laws may change again coming up in 2011), etc.
Maybe the vehicle merely needs to be serviced or perhaps it needs to be replaced altogether. Many folks have a simple will as their estate plan and now should graduate to a trust instead. Like vehicles, estate plans are not all the same. There are differences in wills and trusts and what they can accomplish and there are many different types of trusts. Not all trusts are the same. In fact, often times a family may have more than one trust, just the same as I own more than one vehicle, each with a different purpose.
Some estate planning firms have a maintenance program their clients can subscribe to. The client can come in for regular reviews and checkups to make sure things stay on track. Like a maintenance plan on a vehicle, this can be money well spent. Other benefits of these maintenance plans may include free updates due to law or life changes, electronic storage and 24 hour access to health care documents and emergency contact information, discounts for family members who may need an estate plan and discounts for estate administration services.
For more information about The Retirement Guys, tune in every Sunday at 11 a.m. on 1370 WSPD or visit www.retirementguysradio.com. Securities are offered through NEXT Financial Group Inc., Member FINRA / SIPC. The office is at 1700 Woodlands Drive, Suite 100, Maumee, OH 43537.
