“How do I know if I need to update my Estate Plan?”
By Frank J. Danzo, III, Esq. and Marco D. Chayet, Esq., Chayet & Danzo, LLC, East Denver LIVING WELL Magazine
1. You or a close family member are over age 45
If you or a close family member are older than age 45, you may not be able to make decisions on behalf of yourself or the family member unless you plan ahead. Things can happen unexpectedly at any time (Terri Schiavo was only 26 when she had a heart attack), and things tend to happen more frequently as we age into our 40s. If you have not dictated who can make decisions for you and when they can make the decisions for you, you are doomed to the court making that decision for you.
2. You or a close family member are terminally ill, have failing health or may become incapacitated
If you or a close family member are terminally ill or incapacitated, you will not be able to make decisions on behalf of yourself or the family member unless you plan ahead. If you have not dictated who can make decisions for you and when they can make the decisions for you, you are again doomed to the court making that decision for you.
3. You are self employed or own rental property
If you are self employed or have rental property, keep in mind that there is a significant time delay before a personal representative is appointed to care for rental property or your business in your absence. Essentially, there will be a period of time where your rental property and/or business have to go on “auto pilot.”
4. You have a child who may not be responsible, or is married to someone who may not be responsible
Do you have inheritance protection for a child who may be subjected to a spendthrift spouse, divorce, lawsuits, creditors or bankruptcy? Do you have a child who has a problem with shopping impulse control? If so, there is a way that you can control and minimize this risk through proper planning. Keep in mind that the average inheritance, regardless of size, is completely spent within 18 months of receipt.
5. You have an IRA or a 401(k) account
Retirement accounts are almost never coordinated with an individual’s estate plan, which could result in a tax problem. It is important to put the planning in place to ensure that these plans can continue to grow tax deferred for future generations to come.
6. You have only a simple will in place now
Simple wills are not appropriate for everyone. Used improperly, a simple will can lead to major problems, including subjecting someone to unnecessary estate tax. Even a simple will may fail if you have not properly titled your property. Joint ownership may cause a will to fail as well. In addition, almost everyone over the age of 21 should have a good durable medical power of attorney. This document may be even more important than a will.
7. You have an old estate plan in place
The average estate plan has not been updated in 19.6 years. Consider all the changes in your life and in the law that have occurred over that period of time. Your plan should be reviewed and possibly updated every three to five years.
8. You have a plan from another state.
The average estate plan has not been updated in 19.6 years. It should be updated to reflect the laws of the state where you live NOW. If you have moved from another state, there will most likely be numerous substantial changes that should probably be made to your plan.
Frank J. Danzo, III and Marco Chayet are partners in the law firm Chayet & Danzo, LLC, 303-355-8500. Their practice emphasizes elder law, guardianships, conservatorships, public benefits, probate, estate planning, and long-term care planning. They can be reached online at www.ColoradoElderLaw.com or by e-mail Frank@ColoradoElderLaw.com or Marco@ColoradoElderLaw.com or via mail 650 S. Cherry St., Suite 710, Denver, CO. 80246.
