Year-End Financial To-Do: Review Your Estate Plan

Dec 29, 2020

By Jeffrey R. Wolfe, Senior Vice President, Manager of Wealth Planning Strategies

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So, you’ve made it through Christmas and the year of COVID-19. We’re almost to New Years and hopefully better times. That said, life’s responsibilities remain, and it’s a good idea to review your estate plan should something happen to you or a loved one.

First, make sure you have a plan in place! It’s estimated that over 50% of adult Americans do not even have a plan in place.[1] Having a plan has always been important, but if 2020 has taught us anything, it’s that unexpected events happen. It’s key to have a plan in place to address financial and health care needs, so if you don’t have a plan, make a resolution to meet with an estate planning attorney in January of 2021.

If you have a plan in place, you should review it to make sure your wishes will be met. Again, this is particularly true in the new COVID world. For example, many “traditional” health care declarations and powers-of-attorney have provisions about whether or not you want a ventilator used to prolong your life. Pre-COVID, you may have restricted such use. Now, you may want to reconsider that planning.

Some other key reasons to review – and possibly update – your plan include:

  • Life events – If you’ve experienced a birth, death, marriage or divorce in your life or the life of a loved one, you should review your plan to assure your desires will still be met. These life events can affect how your plan plays out.
  • Changes in the law – Unless your plan was written in January 2018 or later, there’s been a change in the estate and gift tax laws since you created your plan. In December 2017, the federal exclusion was $5.49 million. In 2020 the exclusion will be $11.7 million, and if Congress doesn’t act to change the current law, the exclusion will revert in 2026 to something around $5-6 million.

We also have a new President taking office in 2021. While President-Elect Biden hasn’t provided a specific proposal, he has indicated that he believes the current exclusion is too high.

In short, the law remains in flux and can be affecting your plan, especially if it’s an old plan. Many plans reference the federal estate tax thresholds and stipulate how and who may inherit based on those thresholds, which used to be as low as $600,000. Reviewing your plan will make sure your assets will pass to who you want and how you want.

  • Changes in your net worth – How old is your will or trust? Did you create it the week you brought your daughter home, and now you just finished playing with your grandchildren at Christmas? If your document has some yellowing in the paper, it’s also likely your financial situation has changed significantly since you created your plan. Review your provisions again and see whether it’s time to make a change. With the tax law changes, perhaps you now have an estate tax problem as well. Again, reviewing your plan will help confirm your goals are still being met.
  • Every three to five years – While we’ve raised several “events” that can help motivate you to review your plan, you should still consider reviewing your estate plan every three to five years as a general rule. Estate plans, like homes, require regular maintenance. Even if the events above don’t apply, consider a New Year’s resolution to review your plan every three to five years.

Estate planning can be intimidating, and it’s never all that exciting to plan for your own demise. Your documents may be long and complex as well. Your financial advisor has tools available to help you review your plan, and you can always work with your tax and legal advisors to review your situation as well. You’ve worked hard for what you have and spending some time to create or review your plan will help assure that your legacy goals will be achieved.



The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards & Co. is not engaged in rendering legal, accounting or tax preparation services. Specific questions on taxes or legal matters as they relate to your individual situation should be directed to your tax or legal professional.