Time for an Estate Plan Check-Up

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Jan 01, 2022

By Kim Vine, CPA Partner at Terry Lockridge & Dunn

Kim Vine.jpgYou probably take your car in for regular tune-ups, but what about your estate plan? All too often, people develop an estate plan and then stick it in a drawer or file cabinet where it gathers dust. It is a good idea to review the plan at least once a year to see if it is still humming on all cylinders.

Here are a few common items to put on your estate plan check-up list:

  • Tax law changes. Federal tax law is constantly evolving. For example, the estate tax exemption was recently doubled from $5 million to over $10 million with inflation indexing ($12.06 million in 2022). But this higher exemption amount is scheduled to revert to $5 million (plus inflation adjustment) in 2026, if not sooner, depending on legislation currently being debated in Washington, D.C.
  • State and local laws. Consider implications under state and local laws relating to inheritance and estate taxes, as well as other issues. This is especially true if you have recently relocated to another state.
  • Wills. Your Will is usually a centerpiece of your estate plan and ties all the loose ends together. Wills should be updated as needed to reflect changes in life circumstances, such as births, deaths, and divorces.
  • Power of attorney. A power of attorney (POA) is a legal document authorizing someone—often called the attorney-in-fact—to act on your behalf with financial matters. With a durable POA, this general power continues in the event you become incapacitated. Examine these documents to see if they meet your current needs.
  • Healthcare directives. Similarly, you can adopt a healthcare POA for medically based decisions, as well as authorizing other advanced healthcare directives. Consider drafting a Living Will that addresses end-of-life situations.
  • Trusts. There is a good chance you have created one or more trusts to complement your Will. Review the current designated trustees, and contingent and successor trustees, to ensure they still make sense to you. Make any necessary modifications.

Questions and modifications to the legal documents noted above should be directed to your legal counsel. As always, should you have any questions or concerns regarding your specific tax situation please feel free to reach out to Kim at kvine@tld-inc.com or any of the accountants at Terry Lockridge & Dunn. They can be reached in Cedar Rapids at 319-364-2945 or in Iowa City at 319-339-4884.

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