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Reasons to revise an estate plan

Estate plans should be reviewed periodically. If the plan has been created to reduce or avoid estate tax, it may need to be revised since the exemption has gone up substantially. The document may also need revision if an individual has moved to New York from another state.

People should also make sure that all necessary components are in place. In addition to a will, there should also be an advanced health care directive and financial power of attorney so that the appropriate people can be appointed to take over a person's medical and financial decision-making if necessary. If the will does not include instructions for distributing a person's personal effects, this information could be added as a codicil. There may also need to be changes made regarding the executor or beneficiaries.

Life insurance policies should be reviewed to be sure they have not lapsed or taken on liabilities. People should also review their beneficiary designations on 401(k)s, annuities and other accounts. If there is a trust, and a family member or friend has been appointed as trustee, a person may need to reconsider this decision. Acting as a trustee can be a significant responsibility and entail a great deal of work, so it might be better to have a professional in this role.

People who have been married before or have children from previous relationships should make sure they are not inadvertently cutting a child out or leaving assets to an ex-spouse. Reviewing beneficiary designations may be particularly important because these override trusts and wills. Therefore, if a person has forgotten making a spouse the beneficiary on a retirement account decades ago and later divorces that person, the asset may still go to the ex-spouse regardless of what is in the will or trust. People may also want to consider using a trust in a unique situation, such as a beneficiary who may spend money irresponsibly.

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