When your children leave home, life begins to look different.
The years that once revolved around school schedules, sports, college planning, and raising children gradually transition into a new chapter. You may be focusing more on your career, traveling, preparing for retirement, helping aging parents, or simply enjoying having more time to yourself.
Your financial life has probably changed too.
The estate plan you created when your children were young may no longer reflect your assets, your family, or your priorities today. Becoming an empty nester is a natural opportunity to revisit your estate plan and make sure it still accomplishes what you want it to do. For empty nesters reviewing their changing priorities, a Kent, WA estate planning lawyer can help update an estate plan to reflect their current assets, family circumstances, and goals.
Your Children Are Adults—Does Your Estate Plan Reflect That?
When your children were young, your estate plan may have focused heavily on naming guardians and establishing Trusts to manage their inheritance until they reached adulthood.
Those provisions may no longer be relevant.
Now that your children are adults, different questions become important:
- Should your children receive their inheritance outright or in Trust?
- Are they financially responsible?
- Should one child serve as Trustee or Personal Representative?
- Do you want to provide differently for children based on their circumstances?
- Are there concerns about creditors, divorce, or financial management?
Adult children can have very different needs. Your estate plan can evolve to reflect those differences.
Your Estate May Be Worth More Than It Was 10 or 20 Years Ago
For many empty nesters, the years between raising young children and approaching retirement are also significant wealth-building years.
Your home may have appreciated considerably. Your retirement accounts and investments may have grown. You may have received an inheritance, purchased additional property, built a business, or accumulated other assets.
For homeowners throughout Bellevue, Kirkland, and the greater Seattle area, appreciating real estate can be particularly significant.
An estate plan created years ago should be reviewed in light of what you own today—not what you owned when the documents were originally signed.
Washington Estate Tax May Now Be Part of the Conversation
As your wealth grows, estate tax planning may become increasingly important.
Washington has its own estate tax system that is separate from the federal estate tax. As a result, Washington residents may have state estate tax considerations even when their estates are well below the federal estate tax threshold.
When reviewing your estate plan, consider the value of your entire estate, including assets such as:
- Real estate;
- Retirement accounts;
- Investment accounts;
- Business interests;
- Life insurance; and
- Other significant property.
If your estate has grown substantially since you created your plan, it may be time to discuss whether additional planning strategies are appropriate.
Reconsider Who You Have Named to Make Decisions
Think back to when you originally created your estate plan.
Are the people you selected as your Trustee, Personal Representative, Financial Power of Attorney, and Healthcare Power of Attorney still the people you would choose today?
Relationships and circumstances change.
A parent or older relative you previously selected may no longer be the best person to serve. A sibling may have moved across the country. An adult child who was once too young to consider may now be an excellent choice.
Review each fiduciary appointment and ask yourself whether that person is still willing, able, and appropriate for the role.
Review Your Beneficiary Designations
Your Will and Trust are not the only documents that determine who receives your assets.
Retirement accounts, life insurance policies, and certain financial accounts typically pass according to beneficiary designations.
Those designations may have been completed decades ago.
Review the beneficiaries listed on:
- 401(k)s and other employer retirement plans;
- Traditional and Roth IRAs;
- Life insurance policies;
- Payable-on-death accounts;
- Transfer-on-death accounts; and
- Other beneficiary-designated assets.
Make sure both your primary and contingent beneficiaries reflect your current wishes and coordinate with your overall estate plan.
Is Your Trust Properly Funded?
If you have a Revocable Living Trust, reviewing your estate plan should also include reviewing your assets.
Creating and signing a Trust does not automatically mean every asset you acquire in the future becomes part of it.
Since creating your Trust, you may have:
- Purchased or refinanced a home;
- Opened new investment accounts;
- Changed banks;
- Acquired additional real estate;
- Started or purchased a business; or
- Received an inheritance.
Those changes may affect your Trust funding.
A Trust can only accomplish its intended purpose when your assets are properly coordinated with it.
Think About Your Home
The family home often becomes an important topic when children move out.
You may plan to remain in the home indefinitely. You may be considering downsizing, purchasing a vacation property, or eventually moving closer to your children.
Whatever your plans, consider how your real estate fits into your estate plan.
Ask yourself:
- Who should ultimately receive the property?
- Would you want your children to own it together?
- Should the property be sold and the proceeds divided?
- Is the property properly titled in your Trust?
- Do you anticipate purchasing property in another state?
Real estate decisions can have significant estate planning consequences, so major changes are a good reason to review your plan.
Your Incapacity Planning Matters More Than Ever
As you move into the next stage of life, estate planning increasingly becomes about protecting you—not simply transferring assets after your death.
Your Financial Power of Attorney, Healthcare Power of Attorney, and Healthcare Directive become especially important.
These documents identify who can assist with financial and medical decisions if you become unable to manage them yourself.
Review your documents and make sure the people you selected still understand your wishes and remain appropriate choices.
Consider What You Want Your Legacy to Look Like
When your children were young, the primary goal of estate planning may simply have been making sure they were financially protected.
As an empty nester, you may have more flexibility to think about what you ultimately want your assets to accomplish.
Perhaps you want to help your children purchase homes, provide for grandchildren, support education, make charitable gifts, preserve family property, or create Trusts that protect wealth for future generations.
Estate planning can become less about preparing for an emergency and more about intentionally shaping your legacy.
How Often Should You Review Your Estate Plan?
There is no single schedule that works for everyone, but an estate plan should not be something you create once and forget.
Major life and financial changes should trigger a review.
Consider revisiting your plan after:
- Children reach adulthood;
- A marriage or divorce;
- The birth of grandchildren;
- A significant increase or decrease in wealth;
- Buying or selling real estate;
- Receiving an inheritance;
- Retirement;
- Moving to another state; or
- The death or incapacity of a beneficiary or fiduciary.
Even without a major event, periodically reviewing your documents can help identify outdated provisions before they become a problem.
Your Estate Plan Should Grow With You
The estate plan that protected your family when your children were five years old may not be the plan you need when they are twenty-five.
Becoming an empty nester is an opportunity to look at everything you have built and decide how you want to protect it during the next stage of your life.
At Eastside Estate Planning, we help individuals and families throughout Bellevue, Kirkland, and the greater Seattle area create comprehensive estate plans that reflect their values, priorities, and wishes.
If your children have left home and it has been several years since you reviewed your estate plan, now may be the perfect time to make sure your documents still reflect the life—and legacy—you have today.
Contact us today to schedule your 15-minute consultation.
