Updating Your Estate Planning Documents
One of the biggest mistakes a person can make is not periodically reviewing, updating, and modifying his or her estate planning documents. Once drafted, many people tuck these documents away, and don’t think about them again. However, changes in personal circumstances can have an unintended effect on the eventual disposition of an estate.
From guardianship and power of attorney designations to bequests of assets, life changes can affect many decisions made when an estate plan was originally drafted. For example, if a parent names a guardian for his or her minor children, that guardian may later die or become unfit to serve in the role. If a person makes new investments, or if the size of their estate increases substantially, the amount of federal estate tax owed may increase. Updating estate planning documents can potentially minimize this tax liability.
Fortunately, if plans are not modified after a divorce, Florida has several laws that prevent an ex-spouse from remaining a beneficiary or serving in a decision-making capacity. Any will or trust provision affecting a former spouse, or any document giving power of attorney to a former spouse, or naming him or her as health care proxy, is nullified upon divorce. A former spouse will also be prevented from receiving proceeds from life insurance policies, qualified annuities, and payable-on-death accounts. The only exception is if the estate plan or divorce decree specifically provides otherwise.
A person should update his estate plan plan periodically to help ensure his wishes are carried out. It is always a good idea to review the documents with an estate planning attorney who can provide the best advice on necessary changes.