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financial changes and your estate plan

Financial Changes and Your Estate Plan

Did your finances change? So did your estate plan, whether or not you knew it. Significant financial changes should prompt a call not only to your financial professionals but also to the attorney who handles your estate plan. This is because a change in the size of your projected estate changes your estate plan automatically, without you ever having changed a single document! If you don’t check in with your estate planning attorney, your assets may end up distributed quite differently than you intended when you were in a different financial situation.

Consider the following examples.

Example 1

An increase in the size of your projected estate due to a significant improvement in your financial situation.

The wills of you and your spouse leave everything to your three children after the both of you pass away. You want the children to split your estate into equal shares. Your assets can be easily divided into three shares if one child receives the house and the other two children split your remaining assets, so that’s how you have your wills written. Then, a relative passes away, leaving you $150,000. You intended to distribute assets as equally as possible between your three children, but because of the improvement in your financial situation, if you and your spouse pass away, two of your three children would get more of your estate than the third child who gets the house. This was not your intent, and it happened despite you not making any changes to your documents.

Example 2

A decrease in the size of your projected estate due to an unexpected adverse change in your financial situation.

You and your spouse want to leave almost everything to your two children after you are gone, but you are also both inclined towards charitable giving. Your total net estate is worth approximately $450,000, so you decide that $200,000 is enough to leave each child. Your attorney drafts last wills and testaments stating that $50,000 will go to the American Cancer Society, and the remaining assets will be split into equal shares between your two children. Then, you and your spouse suffer an unexpected financial setback which reduces the total value of your net estate to $100,000. If you and your spouse now pass away, the American Cancer Society gets half of your estate – and your children only get $25,000 each.  This was not your intent, and it happened despite you not making any changes to your documents.

No matter what situation you find yourself in, an attorney specializing in estate planning can help you understand how your financial changes can affect your estate plan and make sure that your estate planning documents reflect your true intent. If you’re worried about how a recent change in your financial situation might have affected your estate plan, contact us today for a consultation.

Russo Law Group, P.C.
100 Quentin Roosevelt Blvd., Suite 102
Garden City, NY 11530

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