Is Estate Planning A One Time Process Or An Ongoing Strategy?

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Is Estate Planning a One-Time Process or an Ongoing Strategy?

Estate planning isn’t a “set it and forget it” task. While creating foundational documents like a Will or Trust is a crucial first step, a comprehensive estate plan requires regular review and updates. Life changes, evolving financial circumstances, and shifts in the law all necessitate revisiting your plan to ensure it continues to reflect your wishes and provide optimal protection for your loved ones.

Think of your estate plan as a living document, much like a business plan. It needs to adapt to the realities of your life. A plan created in your 20s will likely be insufficient in your 40s, 50s, or retirement years. Ignoring these changes can lead to unintended consequences, increased costs, and even family disputes, as Randall experienced.

I’ve practiced estate planning law in San Diego for over 35 years, and I’ve seen firsthand the problems that arise from neglecting to update plans. A well-maintained estate plan isn’t just about avoiding probate; it’s about proactively managing your legacy and providing peace of mind.

What Life Events Trigger an Estate Plan Review?

Several key life events should prompt an immediate review of your estate plan. These include marriage or divorce, the birth or adoption of children or grandchildren, significant changes in your financial situation (such as a large inheritance, the sale of a business, or a substantial increase in wealth), and a move to a different state. Even seemingly minor changes, like updating beneficiaries, can have a significant impact.

For example, a change in beneficiary designations on retirement accounts and life insurance policies can override instructions in your Will. If these designations don’t align with your overall estate plan, it can create unintended consequences. Similarly, if you move to a different state, your estate plan may need to be revised to comply with the laws of your new jurisdiction.

In San Diego, we frequently see clients who haven’t updated their plans after a divorce, leaving their ex-spouse as a beneficiary. This is a common oversight that can easily be avoided with regular reviews.

How Often Should I Review My Estate Plan?

As a general rule, I recommend reviewing your estate plan at least every three to five years, or whenever a significant life event occurs. However, this is not a hard-and-fast rule. If you have a complex estate or anticipate significant changes in the near future, you may need to review your plan more frequently.

A proactive approach is always best. Scheduling regular check-ins with your estate planning attorney allows you to identify potential issues and make necessary adjustments before they become major problems. This also provides an opportunity to discuss any new laws or regulations that may impact your plan.

As a CPA as well as an attorney, I’m uniquely positioned to advise clients on the tax implications of their estate planning decisions. Understanding the step-up in basis, capital gains taxes, and valuation rules is critical to maximizing the value of your estate and minimizing your tax burden.

What Happens if I Don’t Update My Estate Plan?

Failing to update your estate plan can have serious consequences. Your assets may not be distributed according to your wishes, your loved ones may face unnecessary legal fees and delays, and your estate may be subject to higher taxes. In some cases, your estate plan may even be deemed invalid, resulting in a complete intestacy (dying without a Will).

Outdated plans can also create family disputes. If your instructions are unclear or ambiguous, it can lead to disagreements among your beneficiaries, potentially resulting in costly litigation. This is particularly common when blended families are involved.

The cost of not updating your plan far outweighs the cost of regular reviews. A small investment of time and money upfront can save your loved ones a significant amount of stress, time, and expense down the road.

What is the Role of a CPA in Estate Planning?

While an attorney focuses on the legal aspects of estate planning, a CPA provides valuable financial expertise. Understanding the tax implications of your estate planning decisions is critical to maximizing the value of your estate and minimizing your tax burden. A CPA can help you identify tax-saving strategies, such as gifting strategies, charitable donations, and the use of trusts.

For example, the step-up in basis rule allows your heirs to inherit assets at their current market value, potentially eliminating a significant amount of capital gains taxes. A CPA can help you structure your estate plan to take full advantage of this benefit. They can also assist with asset valuation, which is essential for accurately calculating estate taxes.

Having both legal and financial expertise under one roof, as we offer here in San Diego, ensures a holistic and coordinated approach to estate planning. This allows us to identify potential issues and develop strategies that address both your legal and financial needs.

How Does Prop 19 Affect Estate Planning?

California’s Proposition 19 significantly altered the rules regarding property tax transfers. While it allows for the transfer of a parent’s low property tax base to their children, there are strict requirements that must be met. The children must move into the home as their primary residence within one year of the parent’s death, and the home’s value cannot exceed specific limits.

If these requirements are not met, the property tax base will be reassessed to its current market value, potentially resulting in a significant increase in property taxes. This can have a substantial impact on your heirs, particularly if they are on a fixed income.

It’s crucial to understand the implications of Prop 19 and how it affects your estate plan. We routinely advise clients in San Diego on how to navigate these complex rules and ensure their heirs are protected.

What is the Small Estate Threshold in California?

California law provides a simplified probate process for small estates. As of April 1, 2025, the combined value of probate assets (excluding real property) must be below **$208,850** to qualify. If the estate exceeds this limit, formal probate is required, even if you have a Will.

For deaths on or after April 1, 2025, a primary residence up to **$750,000** qualifies for a **”Petition for Succession”**. This requires a Judge’s Order, not just an affidavit. However, other non-real estate assets must remain below the separate **$208,850** limit to qualify.

Distinguishing between a **Small Estate Affidavit** (for real property <$69,625, e.g., vacant land) and **AB 2016** (Probate Code § 13151) is essential for efficiently transferring assets.

What is RUFADAA and Why is it Important?

The Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA), codified as Probate Code § 870 in California, provides a legal framework for accessing digital assets after someone’s death. Without specific RUFADAA language in a Trust or Will, service providers like Google or Coinbase can legally deny an executor access to digital accounts.

This can include email accounts, social media profiles, online banking accounts, and cryptocurrency wallets. Accessing these assets is often critical to managing the estate and fulfilling the deceased’s wishes. It’s important to include clear instructions in your estate plan regarding the management of your digital assets.

We routinely advise clients in San Diego on how to incorporate RUFADAA language into their estate plans to ensure their digital assets are properly managed.

What is the FinCEN 2025 Exemption?

As of March 2025, domestic U.S. LLCs are **exempt** from mandatory Beneficial Ownership Information (BOI) reporting; however, executors of **foreign-registered entities** must file updates within 30 days to avoid **$500/day** fines.

This exemption applies to LLCs formed for legitimate business purposes and not used for illicit activities. It’s important to understand the BOI reporting requirements and ensure your LLC is in compliance.

We assist business owners in San Diego with navigating the complex BOI reporting rules and ensuring their LLCs are protected.

What is the OBBBA and How Does it Impact Estate Planning?

The One Big Beautiful Bill Act (OBBBA) averted the 2026 “Sunset” of the increased Federal Estate Tax Exemption. The Federal Estate Tax Exemption is now permanently increased to **$15 million per person** effective January 1, 2026.

This means that estates below this threshold will not be subject to federal estate taxes. However, it’s still important to plan for potential estate taxes, as state estate taxes may apply. A CPA can help you assess your estate tax liability and develop strategies to minimize your tax burden.

We routinely advise high-net-worth clients in San Diego on how to take advantage of the increased federal estate tax exemption and protect their assets.