We all have to pay taxes—whether we live in Anaheim, another part of Orange County, or elsewhere in the country. Taxes come in many different forms including income, estate, and capital gains taxes. Many people opt to prioritize the minimization of these taxes when preparing their estate plans. The importance of this particular estate planning priority, however, may change over time.
Four Reasons to Update Your Estate Plan When Tax Goals Change
If you previously created an estate plan that prioritized tax savings over other goals, you may later find yourself less concerned about this potential issue. It is very common for priorities to change through the years when it comes to an estate plan. A simple modification to your existing plan may be all you need. Following are some of the more common reasons to update your estate plan when you are no longer focused on minimizing taxes:
- A trust that includes various sub-trusts designed to minimize taxes may be cumbersome to administer if tax savings are no longer a priority.
- Depending on when you executed your estate plan, there is a good chance that laws have changed. Significant changes have occurred several times over the last decade alone. Your estate plan should be updated to reflect these changes.
- The administration of a living trust that involves tax sheltering and planning is often more costly to administer than a more straightforward and simplified trust. If your goal is no longer to minimize taxes, you may be able to reduce these costs by modifying your estate plan.
- Your estate plan may have been designed to minimize taxes as a top priority. In some cases, this may have meant that other estate planning goals were minimized. If your priorities have changed, updating your estate plan can reshuffle the order of importance of the various goals for your estate plan.
Staying on top of your estate plan is easier when you are familiar with the latest news and tips about this important area. To stay up to date, we encourage you to sign up for our free newsletter today!