Studies show that the vast majority of American adults are completely unprepared from an estate planning perspective. Though it should be viewed as a responsibility that all adults must address, people tend to put it on the back burner.
There is no questioning the fact that dying is the last thing on everyone’s to-do list, but it is also something that happens to all of us. As they say, “resistance is futile.” In spite of this obvious reality, inaction is the exception rather than the rule, but we do all that we can to raise awareness.
Since so many people in our country procrastinate, a lot of folks breathe a sigh of relief and put the matter to rest once and for all after they finally take action. They stuff the documents in a safe place and they forget about them. Going forward, they feel as though they have satisfied this responsibility, and the matter is closed.
In reality, this is a big mistake, because estate planning should be viewed as an ongoing process.
There are myriad circumstances that can come down the pike that can call for an estate plan revision. When you put your first estate plan in place, unless you are on or near your deathbed, you should recognize the fact that periodic reviews and possible updates will be necessary as the years pass.
Changes in your own life can trigger the need for estate plan revisions, including additions to and subtractions from the family. The most common subtraction that would call for an estate plan adjustment is a divorce, and unfortunately, a very significant percentage of marriages do not withstand the test of time.
A lot of people that get divorced ultimately remarry, and this is another situation that will render your existing estate plan obsolete. There are specific tools in the estate planning toolkit that are used to address remarriage scenarios. You should explore your options so you can bring your estate plan up to date in the optimal manner.
These are a handful of the different scenarios that can arise that should motivate you to come into our office to have your estate plan revised. In addition to the matters that are specific to you and your family, changes that impact the society as a whole can also enter the picture here.
For example, there is a federal estate tax in the United States that can take a heavy toll on your legacy, because it carries a 40 percent maximum rate. The exclusion is the amount that can be transferred before the tax would be applied, and it is quite high right now at $11.58 million.
The federal estate tax parameters are subject to change via legislative mandate, and they have been altered many times over the years. Your estate plan could have been constructed when you were not exposed, and you can subsequently enjoy financial success. The tax could then become an issue, and there are estate tax efficiency strategies that can be implemented.
On the other side of the equation, since the exclusion was essentially doubled in 2018, your estate plan could have been constructed to mitigate your exposure when you are now completely exempt. Under these circumstances, an adjustment would be called for to reflect the current dynamic.
Here in the state of Hawaii where we practice law, there is a state level estate tax as well, and the parameters for that tax can also be adjusted via legislative mandate.
Take Action Today!
If this post resonates with you because you have not looked at your estate plan in a number of years, now is the time for action. Our doors are open, and we would be more than glad to gain an understanding of your current situation, examine your existing plan, and make the appropriate recommendations.
You can set up a consultation right now if you give us a call at 808-531-5391. There is also a contact form on this website that you can use if you would prefer to send us a message.