Update Your Estate Plan: Ensure Your Legacy is ProtectedAs a small business owner,
The Importance of Regularly Updating Your Estate Plan
As a small business owner, you’ve likely put significant thought and effort into creating an estate plan to ensure your wealth is transferred according to your wishes. However, did you know that most estate plans can quickly become outdated? Regularly updating your estate plan is crucial to ensure it continues to meet your needs and the needs of your loved ones.
Why Update Your Estate Plan?
Estate planning is essential for ensuring that your wealth is distributed according to your wishes and that your loved ones are adequately provided for. However, many estate plans fail to keep pace with changes in laws, financial status, and personal circumstances.
Outdated Plans: Over half of the estate plans are more than three years old. Changes in tax laws, financial status, or personal circumstances can render these plans ineffective.
Ensuring Effectiveness: Regular reviews and updates can ensure your estate plan continues to achieve your desired outcomes.
Professional Guidance: Working with a knowledgeable and empathetic advisor who understands your goals can make a significant difference.
Key Reasons to Update Your Estate Plan
Changes in Tax Laws: Tax laws change frequently. An outdated estate plan might not take full advantage of current opportunities to transfer assets optimally.
Changes in Financial Status: Significant changes in your wealth status can impact your estate plan. Regular updates ensure your plan reflects your current financial situation.
Personal Circumstances: Life events such as marriage, divorce, births, or deaths in the family necessitate updates to your estate plan to ensure it aligns with your current wishes and needs.
Common Issues with Outdated Estate Plans
A significant issue with outdated estate plans is the uncertainty they create. More than 70% of individuals with plans older than three years were unsure whether their plans would deliver the desired results. In contrast, nearly half of those with newer plans felt confident in their estate plan’s effectiveness.
The Estate Planner Problem
Many wealthy families work with trusts and estate lawyers to design their estate plans but ultimately never sign the documents. The main reasons include:
Plans not addressing goals: Over 90% felt their estate plans did not deal with their goals, wants, and objectives.
Advisor unease: 80% felt uneasy with their advisors, leading to a lack of implementation.
Complexity: 53% found the plans too complicated, and 47% felt nervous about the process.
These issues highlight the importance of working with an empathetic advisor who can simplify the process and build rapport.
Next Steps to Consider
Stress Test Your Plan: Regularly stress testing your estate plan can help evaluate its effectiveness under various scenarios. This ensures it is likely to deliver your desired outcomes.
Professional Advice: Engage with a trusted advisor to discuss your estate planning needs and how to best address them.
Conclusion
Regularly updating your estate plan is crucial for ensuring it remains effective and aligns with your current goals and circumstances. By working with a knowledgeable advisor, you can ensure your estate plan continues to protect your wealth and provide for your loved ones.
Ready to update your estate plan? Contact us at Diversified Asset Management to ensure your estate plan is up-to-date and aligned with your goals.
Robert J. Pyle, CFP®, CFA, AEP®, CEPA®
Diversified Asset Management, Inc.
📞 (303) 440-2906 x 101
📧 rpyle@diversifiedassetmanagement.com
🌐 Diversified Asset Management
For personalized guidance tailored to your unique situation, contact Diversified Asset Management, Inc. at info2@diversifiedassetmanagement.com or (303) 440-2906. Our experts can help you navigate the complexities of business succession and ensure a successful transition.
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Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.