Whether your estate plan was created two weeks ago or twenty years ago you should be aware of the situations under which your plan may need to be updated to reflect changed circumstances. Today I am going to elaborate on some of the particular circumstances that may warrant an evaluation of your estate plan.
The Birth or Adoption of a Child
As I wrote in a previous post, it is extremely important to have a comprehensive estate plan when you have minor children. A plan should be in place that clearly expresses your wish’s regarding your children in the event of an emergency. Your estate plan should address who you would like to care for your children as well as reflect your wish’s regarding how your children should be raised in the event that you are unable to raise them.
Wisconsin is a community property state which means that “[e]ach spouse has a present undivided one-half interest in each item of marital property.” Wis. Stat. § 766.31(3). Marital property is presumed to include “[a]ll property of spouses.” § 766.31(2). Property owned before the marriage, or received as a gift or inheritance after marriage, remains individual property. § 766.31(6), (7). If, at your marriage, you want to reclassify any of your marital property as individual property, or vice versa, your estate plan may need to include a marital property agreement with such reclassification. § 766.31(10).
Significant Change in Net Worth
Whether you win the lottery, receive an unexpected inheritance, or have slowly accumulated a significant amount of wealth since you created your estate plan, an estate plan that does not adequately address a significant increase in your assets may result in unfavorable tax consequences. On the other hand, if your assets are significantly reduced from a poor investment decision, for example, your estate plan may no longer have sufficient funds to operate as intended. In either situation, the creation of a new estate plan may be necessary to ensure your assets will be distributed as you wish and your estate will be adequately funded to carry out your wishes at your death.
Death in the Family
Estate plans are designed to function in the face of the unknown. In the event someone named in your will is unable to serve you include alternative personal representatives, trustees, and guardians. To ensure your assets are distributed as you would like you provide multiple levels of beneficiaries. When there is a death in the family the future becomes a littler clearer and your estate plan may need to be updated to reflect this clarity.
When a husband and wife divorce in Wisconsin any provisions in a will providing for the former spouse are nullified. See Wis. Stat. § 854.15. Although this statute may achieve your desire results having your estate plan rewritten would allow you to explicitly state your wish’s regarding your assets.
Move to Another State
Each state has different laws affecting estate plans. As a result of these different laws an estate plan drafted in one state may have completely different results in another state. For example, an estate plan drafted for a married couple in accordance with Minnesota law will likely have different results in Wisconsin as Wisconsin, unlike Minnesota, is a community property state. Therefore, if you move to a different state you should speak with an attorney in that state to ensure your estate plan will continue to have your desired outcome.
Lastly is time. Although your estate plan should have been drafted to last the test of time your needs and goals may have changed since the creation of your estate plan. If your objectives are different from when you drafted your estate plan you may want to have your estate plan updated to reflect this change.
In the event your documents are no longer meeting your needs you should contact an attorney to discuss the creation of a new estate plan. If you would be interested in discussing any of these changed circumstances further please contact me at firstname.lastname@example.org or 920-655-0487.