Is your estate plan aligned with your financial plan?

When was the last time you looked at your estate plan? Last year? Five years ago? There is no doubt that things have changed in your life and your financial situation since then.

Your estate plan is a key part of your financial plan. And, like your financial plan, it’s not a “one-time” item. Just as you have regular reviews for other areas of your life that may change over time, such as your health, your vision, the security of your car and the composition of your investments, your estate plan needs a thorough review. at least once every three to five years. years and whenever you have a life event. By doing so, you can ensure that it reflects your family and employment situation, the value of your assets and your tax concerns as well as any recent changes in tax, estate and probate law.

10 questions that could signal a change in estate plan

Here are ten questions that can help you decide if your estate plan needs to be adjusted:

  1. Has your personal or professional financial situation changed?
  2. What about your tax bracket? Has she changed?
  3. Have you started or sold a business?
  4. Did you receive an inheritance, a large insurance settlement, a bonus or a “golden handshake” package?
  5. Are you separating or divorcing your spouse?
  6. Do you have wedding plans for yourself or your adult children?
  7. Have you added a family member to your household (a new child or grandchild)?
  8. Have you lent money to your children or other family members?
  9. Have you made substantial donations to charity or your children?
  10. Are you worried about outliving someone you have named as your personal representative (executor), power of attorney, health care attorney, or trustee?

1. Has your personal or professional financial situation changed? Have you added assets that you need to protect or taken on more debt (mortgages or loans) that you will need to factor into your plan? If the value or type of assets you own or liabilities you have assumed in your life or business have changed significantly, it may be time to update your estate plan and trust documents to take it into account.

For example, if your estate plan provides that some of your children will receive money/investments upon your death and others will receive real estate or a share of your business, you will want to ensure that the future valuation of these assets return the amount you intend to go to each of them. Your plan may need to be revised to account for any fluctuation in value.

2. What about your tax bracket? Has she changed? If you expect your federal (or state or local) tax bracket to change based on an increase or decrease in your income this year, it could affect the amount of assets you decide to transfer to trusts or the amount you leave to charity to reduce your property tax liability.

3. Have you started or sold a business? If you’ve started a new business, you might consider buying life insurance so that your spouse or children have the money they need to keep going. If you have a business partner, a buy-sell agreement funded by life insurance can help keep the business afloat. If you sell your business, your estate plan should also reflect the proceeds as additional assets.

4. Have you received an inheritance, large insurance settlement, bonus, or “golden handshake” package? Whatever you decide to do with a one-time lump sum payment – ​​increase your personal savings, reduce a loan or other debt, invest it in your business, or simply spend it on a major purchase – you will change the nature of your balance sheet. And according to point 1 above, any key changes in your assets and liabilities remind you to review your estate planning strategy.

5. Are you separating or divorcing your spouse? An impending separation and divorce requires a full review of your estate plan as well as your financial plan. You’ll want to make sure that any assets you own separately and together are properly titled, and that your beneficiaries for any retirement accounts, annuities, and life insurance policies are updated as well.

6. Do you have wedding plans for yourself or your adult children? Properly titling property and updating beneficiaries is also a key part of the estate planning process when you get married. And because marrying a family member (or business partner) could completely change the dynamics of your family or business, you may need to adjust trust instructions and/or appoint new trustees. and successor trustees.

7. Have you added a family member to your household (a new child or grandchild)? Make sure the new family member is acknowledged in your will and other key planning documents. Even if adding them won’t change your plans, you don’t want the omission of a legal heir to jeopardize your estate plan.

8. Have you lent money to your children or other family members? You will need to decide how this will be handled by your estate. An unpaid loan can be considered taxable income for the borrower if it is no longer necessary to repay it. You may also have the option of designating the loaned amount as a donation.

9. Have you made substantial donations to charity or your children? These gifts can remove taxable income from your estate and reduce future estate taxes.

10. Are you worried about surviving someone you have named as your personal representative (executor), power of attorney, health care attorney, or trustee? If the health status, availability or capacity of a person you have chosen for one or more roles in your estate plan or the management of your trust has changed, consider appointing a new person (or organization) to carry out your wishes.

How SVB Private can help you

Your SVB Privé advisor is available as a resource to help you develop and implement estate planning strategies that are consistent with your overall personal financial goals and prepared for:

  • Answer your questions about the estate planning process
  • Refer you to an estate planning lawyer to create or update your documents
  • Make sure your assets are properly titled and account beneficiaries are up-to-date
  • Manage your fiduciary investments

Your advisor can also introduce you to one of SVB Privé’s wealth strategists, who can help you create trust solutions tailored to your specific situation. In situations where an objective third party is required, SVB Private also has the ability to serve as a corporate fiduciary.