Time to Review Your Legacy Plan

Time to Review Your Legacy Plan

Here are seven key times to assess your estate plan

Everybody knows they should have a legacy plan. Many people say, "Sure, I'm all set." But when was the last time you checked to make sure the plan still made sense in today's world?

Time and time again we hear stories of families who were "all set" with their estate plan, but when time came to implement the plan something goes wrong and creates delay, complications and expense for the heirs.

All these problems can be prevented. Here's how.

Review every three to five years.  Things change, especially estate law. Changes in law can change the rules about what sort of estate is taxable. Be sure your plan is up to date with current law.

Here are seven key times to assess your estate plan

Review after life events. The death of a family member or birth of a child; the formation of a new marriage, or the dissolution of an old one, are all important Legacy Planning life events. Even the incapacity of a family member, or executor of the legacy plan, can be an important life event.

Review after a change in financial circumstance. If your business has prospered, or if it has hit hard times, your plan may need adjustment.

Review all beneficiary designations. It's a common error to have beneficiary designations that don't reflect the family's current situation. If you own IRAs, 401(k)s, 403(b)s or life insurance, be sure that all the beneficiaries are named along the lines of the Legacy Plan. You don't want the ex-wife to get your life insurance death benefit when the current wife has all your children.

Review titles on all your property. It's very common for one parcel of land to be titled incorrectly when processing an estate. Many times this requires probate for the entire estate. Sometimes the probate process will defeat many of the benefits from having the original legacy plan.

Review your gifting plan. Are you gifting on schedule and maximizing the annual gift exclusion amount? Can you increase the pace of gifting to provide more help to your heirs without creating a problem for your Legacy Plan?

Review corporate procedures. Many times corporations or limited partnerships are used as part of the Legacy Plan. If you are not carefully following the rules for maintaining books and records then these entities may not be considered valid by the IRS or probate court.

Your Legacy Plan is an ongoing conversation between the older generation and the younger generation about the future of the family and the vision for the family business. An annual family meeting to review all aspects of the family business should include a review of the Legacy Plan. It's an excellent way to avoid future trouble.

If this blog has got you thinking about your own situation, get in touch with my office ([email protected]). I am always happy to visit with folks working on their transition process.

The opinions of Rich Dunn are not necessarily those of Farm Futures or the Penton Farm Progress Group.

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