Estate planning is more than a set-it-and-forget-it task. It requires ongoing attention to ensure that the plan continues to meet your goals, aligns with current laws, and reflects your changing financial and personal situations.
As a high-net-worth individual, you have worked hard to build and maintain your wealth, and it is crucial to have an estate plan that protects and transfers this wealth in accordance with your wishes. A well-crafted estate plan not only ensures that your loved ones are provided for but also minimizes the tax impact, helps preserve family harmony, and maintains your legacy.
However, many affluent individuals fall into the trap of thinking that they are set for life once they have an estate plan in place. This misconception can lead to significant issues down the road as life changes, tax laws evolve, and financial situations fluctuate. Regular updates to your estate plan are essential to ensure it remains relevant and effective. Regular reviews and updates can prevent your plan from becoming outdated and potentially failing to achieve your desired outcomes.
An outdated estate plan can pose significant risks, such as potentially failing to leverage current tax opportunities or not reflecting changes in your financial or personal circumstances. Here are key reasons why regularly updating your estate plan is essential:
Effective estate planning integrates technical expertise and a deep understanding of your personal goals and values.
Exceptional estate planning requires a thorough understanding of complex estate laws and advanced strategies. Here are two primary tools used in sophisticated estate planning:
The human element of estate planning focuses on ensuring your wealth is transferred according to your wishes, not just on minimizing taxes. This involves understanding your personal agenda and creating a plan that reflects your values and goals.
A genuinely exceptional estate plan results from an estate planner’s ability to blend technical strategies with a deep understanding of your unique situation. This means knowing your values, goals, and concerns and crafting a plan that aligns with these personal aspects.
Your estate plan should be a living document, regularly reviewed and updated to reflect changes in laws, finances, and personal circumstances. Consider stress testing your plan to ensure it is still aligned with your goals and capable of delivering the desired outcomes. A stress test involves having your wealth manager review your plan and current situation to answer two critical questions:
Is the plan likely to deliver the outcomes you currently want?
Is the plan missing anything that can make it more effective or efficient?
Estate planning should be a part of pursuing the outcomes you want in your financial life and the lives of the people you care about most. Moreover, your existing estate plan should be reexamined occasionally and revised if necessary to remain effective. Regularly updating your estate plan is essential to ensure that it continues to meet your goals, align with current laws, and reflect your changing financial and personal situations.
As wealth managers, our goal is to help our clients make smart decisions with their money so they can focus on what matters most to them—their business or career, their family, and the causes they care about deeply. By staying proactive and informed about your estate planning, you can make intelligent decisions that allow you to focus on what matters most in your life.
If you have any doubts about your current estate plan or want to stress test it, I invite you to call your attorney or contact your Modera advisor. Let’s work together to ensure your estate plan is as effective and as aligned with your goals as possible.
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