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Updating Your Estate Plan Provides Greater Peace of Mind

Updating Your Estate Plan Provides Greater Peace of Mind

August 05, 2021

The COVID-19 pandemic has made us all aware of how the world can change in an instant. Many suffered the loss of a spouse, family members and close friends. Some families were ill-prepared to deal with the urgent need to make critical healthcare and financial decisions for our loved ones.

Research by found that more than two-thirds of Americans do not have a will. Most people initially write a Will so that their heirs can avoid probate, but as their assets increase, it becomes even more important to have a Will and related documents that detail their preferences and designations. 

Here at JK Investment Group, we know that far too often, estate plans are created, signed and then set aside and forgotten. Even if you believe your personal situation is in good shape, the pandemic has been a significant reminder to speak with an attorney to re-evaluate and update your estate plan.

Assess Changes in Your Family Situation

Most people write their wills when they start their families to ensure their children and legacy are provided for appropriately. However, as children become adults, parents often decide to name their children as powers of attorney for financial and healthcare decisions.

Over the years, relationships change and the individuals you designated as trustees or powers of attorney may no longer be a part of your life. In some cases, designees are no longer mentally or physically able to fulfill their roles. Reviewing your designees for trustees and powers of attorney for healthcare and financial decisions should be done regularly to ensure those you have selected are capable and up-to-date on your wishes.

You may wish to transfer part of your wealth to your children and grandchildren, or to fund college expenses. Lindsey Smith, a shareholder at Cavitch, Familo & Durkin and an estate planning attorney with more than 40 years of experience, observes that with divorce so prevalent, contingency plans may be needed to protect family assets in case married children contemplate divorce.

Consider the Growth of Your Financial Assets

A Boston College survey estimates that there will be a transfer of wealth among estates in the U.S. of approximately $59 million between 2007 and 2061.

From the time you initially developed your estate plan, your financial assets may have increased substantially through an inheritance, marriage, the sale of a business or real estate, stock market gains or other financial transactions. Such asset growth can make a significant difference in how you manage your wealth and consider your estate plan.

Lindsey notes that tax planning and mitigation become more important as financial assets grow. You may need to enhance your estate plan to address previously unforeseen issues such as estate tax, charitable gifts and generational transfer of wealth.

Potential Impact of Estate Tax Reform

The Biden administration in Washington is likely to bring about reform to estate tax laws that could affect many high-net-worth families. Lindsey notes that in 2021, each person can give away $11.7 million per person, either during their lifetime or distributed at death, without being subject to federal estate tax. (Ohio has no estate tax.) This amount was increased through the Tax Cuts and Jobs Act and it is scheduled to roll back at the end of 2025.

It is not yet clear how estate tax will be handled going forward—but the estate tax credit is likely to be reduced. Many clients are concerned about this change and how it will affect their generational transfer of wealth. We will cover this topic in detail in a future issue of our newsletter as more information becomes available.

Getting Started

Lindsey begins the process of creating or updating an estate plan by meeting with clients, their financial advisor and accountant. The first step is to create a current schedule of assets to help determine the complexity of the estate plan and associated tax planning.

Clients often come to Lindsey with the goal of avoiding probate, but he believes that asset protection should be the paramount goal of an estate plan. Financial advisors play an important role in ensuring the estate plan is properly funded. Assets must be properly aligned so that probate can be avoided and taxes can be mitigated.

Act Now – Don’t Delay

It is crucial to update or to create your will, trusts and sub-trusts and healthcare and financial powers of attorney to ensure your wishes are properly addressed and late-in-life care is achieved.

We can’t predict when the next crisis may arrive, but being prepared with an updated estate plan will give you greater peace of mind and a sound strategy for asset protection for your family.

For more information, please call us at 216.313.9999.

JK Investment Group is not an accountant or attorney, readers should consult with their own independent legal and tax advisor before taking any action based on the content provided on this website.

Securities offered through Regulus Financial Group, LLC. Member FINRA/SIPC. Investment advisory services offered through Regal Investment Advisors, LLC, an SEC Registered Investment Advisor. Registration with the SEC does not imply any level of skill or training. Regulus Financial Group, LLC and Regal Investment Advisors are affiliated entities. JK Investment Group is independent of Regulus Financial Group, LLC and Regal Investment Advisors.