Congratulations! You’ve landed that dream job, or maybe you’ve decided to embark on a whole new career path. Welcome to Arizona if you’ve just relocated here from out of state! It’s an exciting time, filled with new challenges and opportunities. But amidst the whirlwind, have you considered how this career change might impact your estate plan? Many people think of estate planning as a static document, set in stone once drafted. While we do our best to build contingencies into your estate plan, life has a way of throwing curveballs. A significant career shift is one such curveball that can necessitate a review of your estate plan.
Here’s Why:
- Change in Income and Benefits: A new job might mean a significant increase or decrease in your income. This can affect your estate tax liability. If your estate value surpasses the federal estate tax exemption (currently quite high at $13.61 million for 2023, but subject to change), you may want to explore strategies to minimize the tax burden on your beneficiaries.
- New Retirement Accounts: Your new employer might offer a different type of retirement plan compared to your previous plan. Understanding the beneficiary designations on these accounts and how they fit with your overall estate plan is crucial. Also don’t forget to move your 401(k) when you change jobs! If you need help with this transition, we can put you in contact with one of our trusted financial advisor partners.
- Relocation: Did your new job require a move across state lines? This can trigger a domino effect. Different states have varying estate planning laws. Your current plan, optimized for your previous location, might not be as effective in the new state. It’s a great idea to at least have an attorney review your old estate plan for compliance with your new state’s laws. Even if only minor tweaks are needed, you will have peace of mind knowing you are still protected.
- Shifting Needs for Life Insurance: Perhaps your new job offers more comprehensive life insurance benefits. This could present an opportunity to adjust your existing policy or even cancel it if the new coverage is sufficient. We also have partners who specialize in life insurance, and we can connect you with someone who can review your coverages and ensure you and your loved ones are still adequately covered.
- Beneficiary Review: Have there been any changes in your personal life that might impact your beneficiary selections? A new career path could mean a new romantic partner or a child born after your initial plan was drafted. Revisit your beneficiary designations to ensure they reflect your current wishes, especially on life insurance.
What to Do Next:
So, you’ve realized your career change might necessitate an estate plan update. Here are some practical steps you can take to update your estate plan:
- Gather Your Documents: Compile your existing estate planning documents, including your will, trust (if applicable), and beneficiary designations for retirement accounts and life insurance policies. We will review them to determine where updates may be needed.
- Schedule a Consultation: Our estate planning attorneys at Windrose Law Center can review your documents, consider your new circumstances, and advise you on any necessary revisions. We can also explain relevant state laws and guide you through the update process.
- Consider a Comprehensive Review: Even if your career change seems minor, it’s a good opportunity to schedule a general review of your estate plan. Life circumstances can evolve in subtle ways, and our attorneys can ensure your plan remains aligned with your current wishes.
By taking these steps, you can ensure your estate plan continues to effectively distribute your assets and care for your loved ones, even after a significant career change. Remember, a well-crafted estate plan provides peace of mind, knowing your legacy is secure. Schedule a free 30-minute consultation with us today!