Review Your Estate Plan
With your estate plan successfully implemented, one final but critical step remains: carrying out a periodic review and update.
Since you implemented your estate plan five years ago, you got divorced and remarried, sold your house and bought a boat to live on, sold your business and invested the money that provides you with enough income so you no longer have to work, and reconciled with your estranged daughter.
This scenario may look more like fantasy than reality, but imagine how these major changes over a five-year period may affect your estate plan.
And that's without considering changes in tax laws, the stock market, the economic climate, or other external factors. After all, if the only constant is change, it isn't unreasonable to speculate that your wishes have changed, the advantages you sought have eroded or vanished, or even that new opportunities now exist that could offer a better value for your estate. A periodic review can give you peace of mind.
Large Estates - every year
Persons with large estates (over the applicable exclusion amount) should review their plan annually or at certain life events that are suggested in the following paragraphs. Not a year goes by without significant changes in the tax laws. Staying on top of these will yield the best results.
Small Estates - every five years
Persons with smaller estates (under the applicable exclusion amount) might need to only review their plan every five years, or following changes in life events. These estates are not usually as affected by economic factors and changes in the tax laws to the same extent a larger estate might be. However, your personal situation is bound to change, and reviewing and making appropriate updates at least every five years can help you keep your plan up to date with your current situation.
Changes in Estate Valuation
If the value of your estate has changed more than 20 percent over the last two years, you may need to update your estate plan.
You may need to review your estate plan if there has been a change in the value of your assets or your income level or requirements, or if you are retiring.
Changes in Occupation or Employment
If you or your spouse changed jobs, you may need to make revisions in your estate plan. Also, if you have changed beneficiary designations for any retirement plants at work (or for other retirement accounts), review and revisions to your plan may be advisable.
Changes in Family Situations
You may need to update your plan if:
- Your (or your children's or grandchildren's) marital status has changed
- A child (or grandchild) has been born or adopted
- Your spouse, child, or grandchild has died
- You or a close family member has become ill or incapacitated, or
- Other individuals (e.g., your parents) have become dependent on you. For example, many states have a law revoking all or part of your will if you divorce or remarry.
Changes in Your Closely Held Business Interest
A review is in order if you have:
- Formed, purchased, or sold a closely held business
- Reorganized or liquidated a closely held business
- Instituted a pension plan, executed a buy-sell agreement
- Deferred compensation, or changed you employee benefit plans
Changes in the Estate Plan
Of course, if you make a change in part of your estate plan (e.g., create a trust, execute a codicil, etc.), you should review the estate plan as a whole so that it remains cohesive and effective.
After Major Transactions
It may be wise to review your plan if you have:
- Received a sizable inheritance, bequest, or similar disposition
- Made or received substantial gifts
- Borrowed or lent substantial amounts of money
- Purchased, leased, or sold material assets or investments
- Changed residences
- Changed significant property ownership, or
- Become involved in a lawsuit
Changes in Insurance Coverage
Making changes in your insurance coverage may change your estate planning needs, or may make changes to your plan necessary. Therefore, inform your estate planning advisor if you make any change to life insurance, health insurance, disability insurance, medical insurance, liability insurance, or beneficiary designations.
Death of Trustee/Executor/Guardian
If a designated trustee, executor, or guardian dies or changes his or her mind about serving, you need to revise the parts of your estate plan affected (e.g., the trust agreement and your will) to replace that individual.
Other Important Changes
None of us has a crystal ball. We can't think of all the conditions that should prompt us to review and revise our estate plans. Use your common sense. Have your feelings about charity changed? Has your son finally become financially responsible? Has your spouse's health been declining? Are your children through college now? To be certain your estate plan remains responsive to your needs, you should give it some thought from time to time and consult with your advisors as necessary, or if you have any questions.
Important Legal Disclosures and Information
The PNC Financial Services Group, Inc. (“PNC”) uses the marketing name PNC Wealth Management® to provide investment and wealth management, fiduciary services, FDIC-insured banking products and services, and lending of funds through its subsidiary, PNC Bank, National Association (“PNC Bank”), which is a Member FDIC, and to provide specific fiduciary and agency services through its subsidiary, PNC Delaware Trust Company or PNC Ohio Trust Company. Securities products, brokerage services, and managed account advisory services are offered by PNC Investments LLC, a registered broker-dealer and a registered investment adviser and member of FINRA and SIPC. Insurance products may be provided through PNC Insurance Services, LLC, a licensed insurance agency affiliate of PNC, or through licensed insurance agencies that are not affiliated with PNC; in either case a licensed insurance affiliate may receive compensation if you choose to purchase insurance through these programs. A decision to purchase insurance will not affect the cost or availability of other products or services from PNC or its affiliates. PNC does not provide legal, tax, or accounting advice unless, with respect to tax advice, PNC Bank has entered into a written tax services agreement. PNC does not provide services in any jurisdiction in which it is not authorized to conduct business. PNC Bank is not registered as a municipal advisor under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Act”). Investment management and related products and services provided to a “municipal entity” or “obligated person” regarding “proceeds of municipal securities” (as such terms are defined in the Act) will be provided by PNC Capital Advisors, LLC, a wholly-owned subsidiary of PNC Bank and SEC registered investment adviser.
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Important Information about Procedures for Opening a New Account
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.
What this means for you: When you open an account, we are required by Federal law to ask for your name, street address, date of birth (for natural persons) and other information as required to identify you. This may include a request or requests for confirmatory information such as presentation of your driver’s license and/or other document(s).
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