2011: Have You Updated Your Estate Plan?

In San Diego, many residents have a revocable living trust or estate plan. The beginning of the year is a good time to review your estate plan for any changes. Revocable living trusts and other estate plans should be reviewed not only periodically but also when certain events occur. Below is a partial list of these triggering events for 2011 but this is not complete. Please feel free to contact us to schedule an appointment to review your estate plan to see if it needs to be updated or, if you do not have an estate plan, to prepare one.

Marriage: if you married after your estate plan and/or revocable living trust was prepared, you need to update the estate plan. Marriage in San Diego is a significant estate planning event as your new spouse needs to be included in the estate plan.

Re–Marriage: if you were married at the time of your estate plan and then divorced and now remarried, you need to update your estate plan. It is very important to have your ex spouse not included {and perhaps even specifically disinherited} in the estate plan and to have your new spouse included.

Divorce: if you were married at the time of your estate plan and divorced [but not remarried], then you need to update your estate plan. This is very important and, post entry of judgment for divorce, you can prepare a singles trust. In many divorce judgments, it is customary to specifically state the ex spouse will not inherit but your estate planning documents should specifically state this.

Legal Separation: if you were married at the time of your estate plan and legally separated, then you are still married under San Diego law. As such, you should consider updating your estate plan to specifically disinherit your spouse since, under San Diego law, your wife would inherit unless the legal separation document has provisions such as those in a divorce as above. Given that the marital status does not terminate in a legal separation, this is a crucial factor.

Birth of Child: if you have had a new child born after you prepared your estate plan, you will need to update to make sure this child is included as a beneficiary of your revocable living trust or estate plan. This is also very important as you have the option to name a guardian in your estate plan for any minor children.

Adoption of Child: if you have adopted a child after you prepared your estate plan, as with the birth of a new child, you will need to update your revocable living trust or estate plan. This will insure that this adopted child is included as a beneficiary in your estate plan.

Birth of Grandchild: if you have had a grandchild after you prepared your estate plan, it is a good idea to update your estate plan. This will insure that the grandchild is included in your estate plan. Some trusts also contain “spendthrift” provisions so that any bequests are limited as to the amount and time of disbursement. As an example, the distributions can be used for education or for a downpayment on a house. In addition, the disbursements can be limited to percentages by age such as 25% at age 18, 25% at age 21, 25% at age 25 and the remaining 25% at age 30 or any other formula you would like.

Divorce of Child: if your child has divorced after you prepared your estate plan, it is a good idea to consider updating to make sure that their ex spouse is not included in your estate plan.

Death of Child: if your child [or one of your children] has passed away after you prepared your estate plan, it is very important to update your estate plan. You will need to decide if the distribution to the child should be then divided among your other children {either equally or unequally} or, if the child who passed away has children, whether their share should go to their children.

Death of Grandchild: if one of your grandchildren has passed away after you have prepared your estate plan, it is [again] very important to update your revocable living trust and estate plan. You can decide whether this grandchild’s distributions should be divided among your children or remaining grandchildren or another person.

Purchase of Real Property: if you have purchased real property since your estate plan was prepared, it is important to update and make sure that the real property is in the name of the revocable living trust to avoid probate of this new real property. While most revocable living trusts have a pour over will, the name of the real property should be in the estate plan.

Sale of Real Property: if you have sold real property since your estate plan was prepared and this real property was included in your estate plan, then your revocable living trust should be amended to reflect this and updated.

Retire: if you have retired since your estate plan was prepared, you need to consider updating your estate plan.

Disability: if you have become disabled since your estate plan was prepared, it is a good idea to have the estate plan reviewed and updated.

Death of a Beneficiary: if one of your beneficiaries have passed away since your estate plan was prepared, you will need to update the estate plan and revocable living trust to reflect this and also to decide the distribution of your estate after the death of the beneficiary.

Death of a Trustee: if one of your trustees has passed away since your estate plan was prepared, it is crucial to update your revocable living trust and estate plan so that a new trustee is named.

Death of an Executor: if your executor has passed away since your estate plan was prepared, it is very important to update your revocable living trust to name a new executor to make sure your wishes are carried out after you pass away.

Changes to Current Estate Plan: do you want your current beneficiaries to remain the same? Do you want your executor and/or trustee[s] to remain the same? Do you want the distribution of your assets to remain the same? Are there any other changes you would like to make? In conclusion, this is not a complete or exhaustive list and only some factual patterns which will necessitate considering updating your estate plan. Our law firm can advise you regarding your individual need for an update.