When should high-net-worth individuals update their estate plans?

On Behalf of | Nov 15, 2021 | Estate Planning |

San Jose is Silicon Valley’s largest city. As such, many high-net-worth individuals live and work in this area of California. They work extremely hard to keep up with the ever-evolving tech environment for which Silicon Valley is known.

It makes sense for these high earners to do all they can to preserve their assets and their legacy for future generations. After all, estate planning laws across the nation evolve and change just as rapidly as the tech industry evolves.

How often should you review or update an estate plan?

You probably already know you should review and update your plan when your life changes. Examples include a divorce, a marriage or the birth of a child. However, you should also schedule a periodic review if you earn a lucrative income. A top reason for high-net-worth individuals to conduct an estate plan review is because of changing estate tax laws.

For example, the estate and gift tax exemption will reduce by half in January 2022. Right now, this exemption stands at 11.7 million per person (after adjustments for inflation). The upcoming change will set this amount at $6.2 million, also adjusted for inflation.

A regular review can ensure that you keep up with changing estate tax laws and adjust your existing plan accordingly. At the same time, you can address any personal changes in your life (divorce, new baby, etc.) to ensure that your loved ones remain protected.

Complex estate planning issues require ongoing attention. How often you should review your plan depends on your situation, your wealth and your personal life. We typically recommend scheduling a review at least once a year, especially if you are a high earner. It is also wise to continue cultivating your knowledge of estate planning laws here in California and nationwide.