How Life Events Can Affect Your Estate Planning Goals

A well thought out estate plan usually lasts quite a while. As a result, we have found that the majority of our estate planning clients tend not to be repeat customers. By that, we mean that they don’t come back to us very frequently once they have their core estate planning documents in order. And that’s the goal—to make sure that they have an estate plan in place that will last a while. Of course, we do have some clients with whom we meet with more regularly (generally no more frequently than annually), but this is generally the exception and involves the monitoring of more complicated planning strategies. For the most part, with a flexible estate plan in place there isn’t always the need to revisit it too often. What does bring clients back to reevaluate their plans are “life event” changes. These can involve events such as marriage, divorce, the birth of children or grandchildren, the death or incapacity of family members or other individuals named in the documents, the purchase of a house, start of a business, sale of a business, just to name a few. Having said that, this article mainly focuses on “life events” such as the events or circumstances described above. Although not the focus of this article, tax law changes as it relates to the federal estate and gift tax exemption amounts (currently $12.06 million per individual or $24.12 million for a married couple) also tend to cause an influx of repeat business (or at least discussions about whether to consider additional planning).

The life events of marriage and divorce are big motivators for individuals to consider engaging in, or reevaluating, an estate plan. For young first-time marriages, our experience is that those couples aren’t always super-motivated to begin the estate planning process right away (with the exception of those who may have already signed prenuptial agreements), and often wait until the birth of their first child. In the event that a married individual was to die before executing a will, the surviving spouse would inherit a share of the estate under intestate succession laws. Even with a proper will in place, spouses have certain inheritance rights (known as “elective share” rights in Pennsylvania) to the extent that they are not properly covered under a will. Having the certainty of a well thought out estate plan after marriage is certainly advisable. This would cover not only a will and possibly a revocable trust, but also a general power of attorney and a living will declaration and durable health care power of attorney.