ARTICLE: Updating Your Estate Plan After Receiving an Inheritance

Updating Your Estate Plan After Receiving an Inheritance

Updating your estate plan following an inheritance is an important step to ensure your assets are distributed as you wish and to minimize potential tax implications. Receiving an inheritance can significantly change your financial situation, often adding new assets like real estate, investments, or cash that weren’t previously considered in your estate plan. By revising your plan, you can assign beneficiaries to these new assets, thereby avoiding legal issues and ensuring they are distributed according to your preferences. Below are several key steps to consider:

Review Your Current Estate Plan
Start by examining your existing will, trusts, powers of attorney, and medical directives. Consider how the inheritance affects your overall asset situation and whether your current directives still align with your intentions.

Consult with Professionals
It’s advisable to seek advice from an estate planning attorney and possibly a tax advisor. An attorney can help you integrate your inheritance into your existing estate plan effectively, and a tax advisor can provide guidance on any tax impacts.

Update Your Will and Trusts
Depending on the nature of the inheritance and your current estate plan, you might need to amend your will or revise any trusts. This could involve specifying new beneficiaries, changing the distribution of assets, or setting up new trusts.

Consider Tax Implications
Understand the tax implications of your inheritance. This might involve estate tax, inheritance tax, or capital gains tax considerations, depending on how the assets are held and your local tax laws.

Adjust Beneficiary Designations
Don’t forget to review and possibly update the beneficiary designations on retirement accounts, life insurance policies, and other accounts. These designations often supersede wills and trusts, so it’s critical they align with your overall estate planning goals.

Assess Need for Additional Estate Planning Tools
Depending on the size and complexity of your inheritance, you might consider additional estate planning tools such as family limited partnerships or charitable trusts, which can offer further tax benefits and asset protection.

Communicate Changes
Once updates are made, communicate any significant changes to those affected, including beneficiaries and those who have roles in your estate plan, like executors or trustees.

Review Regularly
Make it a habit to review your estate plan regularly, especially after major life events or significant changes in your financial situation.

If you have recently received an inheritance and are considering updating your estate plan, we are here to help. Reach out to our office today to ensure your new assets are seamlessly integrated and aligned with your long-term wishes. Call Roth Elder Law, PLLC at 607-962-6162 or complete this intake form and we’ll be in touch to schedule a meeting.

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We at Roth Elder Law, PLLC, believe in providing services in a way that clients can easily understand and meaningfully participate in designing and maintaining their estate plan for their loved ones, as well as be assured that their plan will be administered according to their wishes.