TO DO LIST:
- Oil Change
- Dentist Appointment
- Take Fido for checkup
Whether we think about it or not, most of us work off mental checklists to help us take care of those things in our lives that need occasional attention. Here’s one thing you should add to your checklist: Review and update your estate plan.
If you don’t have an estate plan (a will or a trust), maybe it’s time to put one together. If you do have an estate plan, that’s great, but you can’t afford to rest on your laurels. It’s important to review your plan every few years and update when necessary.
We recently talked to a client who is the surviving spouse of a couple who created a joint trust as their estate plan in the late ‘90’s. At that time, their total estate was worth less than the amount they could leave to their children without incurring inheritance tax.
Twenty years later, one spouse is deceased, and the value of the estate assets has nearly doubled. Under current Oregon law, the surviving spouse can only leave $1 million in assets to her children tax-free. Assets above that level will be subject to Oregon estate tax. The problem is that while the value of the client’s assets has gone up significantly, the Oregon exemption has only increased $50,000, from $950,000 to $1 million.
Had the client and her husband reviewed and updated their trust at regular intervals (say, every 3 – 5 years), they could have taken steps to eliminate the potential liability for Oregon estate taxes. But now that one spouse is deceased, the opportunity to avoid such taxes is substantially diminished.
So put this new item on your checklist of things to do every so often. It could pay rich dividends for you and your family.