One of the features of the tax reform legislation has been to double the federal estate tax exemption to over $10 million. Regardless of whether this becomes law, undertaking an appropriate level of estate planning remains important.

First, there is still a need to take care of family, to take steps to protect children, and to make sure a plan is in place to protect your home and the assets that you have accumulated. In that sense, estate planning is very much about taking care of those who are close to you. This should remain a priority regardless of when the estate tax kicks in.

Second, health care planning remains critical to ensure that your wishes will be carried out and values upheld, if you are in a situation where you are unable to articulate them.

Third, estate planning remains a mechanism to work towards life time goals, and to prepare beneficiaries to both receive assets and the knowledge, experiences, and values that are needed to preserve them.

Fourth, without estate planning, the assets that one does accumulate likely will be subject to probate. Estate planning can sometimes provide alternatives to probate, so that assets are transferred without the delay, expense, and stress that can accompany probate proceedings.

Finally, tax planning still may be necessary. The federal estate tax threshold does not affect the Illinois estate tax. That remains at $4 million. Therefore, it is possible for some families or individuals to have an estate that is exempt from the federal tax but still subject to Illinois estate tax.

For these reasons, estate planning remains an important thing to do and to keep current. Regardless of what happens with the federal legislation, neither the needs of families nor applicable state tax rates appear likely to change in the foreseeable future.

What happens to an estate plan done in another state? Here are a few areas of concern.

1. Adequate execution of documents
The documents that make up most estate plans are subject to state law requirements, including the requirements for how documents are executed. This includes the number of persons who must witness the signing of a document, and whether such signatures must be notarized. Written instructions prepared by an individual that are not properly incorporated into a will are another potential problem. Documents and attachments that are not fully and properly executed may be given no effect, which can have potentially costly and far-reaching consequences.

2. Tax thresholds
State-level estate tax is another potential problem. To the extent that an estate plan contemplates tax thresholds that are higher than those of Illinois, the plan may be exposed to more taxation than otherwise may be required.

3. Real estate
What happened to the real estate owned in the previous state? If it was sold, the distribution scheme in the prior estate plan may now be unbalanced, particularly if intended for only certain beneficiaries. If the real estate is still owned, the manner in which it was held may or may not be optimal from the standpoint of Illinois residency. For example, if owned outright rather than through a trust or business entity, then it may be subject to a probate or an ancillary probate proceeding on the death of the owner.

4. Agents
Powers of attorney for healthcare and property contemplate the appointment of an agent to assist you in conducting your affairs in the event of a period of incapacity. If moving from far away, it may become very burdensome for your agent to continue to serve in that manner, particularly to the extent that travel to Illinois becomes necessary. Therefore, it is worth considering whether to designate someone more proximate as an agent.

5. Beneficiaries
Many types of accounts, including bank accounts, investment accounts, retirement plans, and life insurance policies offer or require beneficiary designations. They should be updated with any new contact information to avoid delays or other problems when a distribution becomes due.

Any pet owner would tell you that their pet is an important part of their family and their home life. Unfortunately, the news is full of stories about animals that were cast into chaos and neglect after their owner dies, either because no one know what to do, or no one cared enough to take action.

As a general matter, trusts often provide for the health and welfare of family members or other beneficiaries. Pet trusts can be created to provide for the health, care, and welfare of family pets as well, should they outlive the person or people with whom they reside. This can protect the pet or pets from being forgotten or left to fend for themselves.

Pet trusts work by transferring an amount of money into trust to provide for food, veterinary care, recreational costs, supplies, and other expenses. A trustee of the pet trust (who may be a different person than other appointed trustees) is appointed to receive possession of the animal or animals, and will have responsibility for their care. The purpose of the pet trust is to ensure the same quality of life for the animal as the original owner would have provided. They also can appoint a third person to ensure that proper care and good living conditions are being provided, and funds are being used by the trustee appropriately.

Once funded, the pet trust will provide the animal with a safety net that ensures that proper care will continue to be available.

Joe wanted an evaluation of an estate plan he had done many years ago. It turned out the executor Joe named had passed away, and the alternate had moved across the world. By designating new people, Joe was confident that the plan would be carried out properly.

Joe’s story is one example of how an old estate plan can have negative effects. When agents or executors are no longer able to serve, or move away, it may be appropriate to designate new people.

Divorce is another. Although the divorced spouse is deemed to have predeceased for the purpose of interpreting a will, the same is not true for contractual agreements and investments (such as life insurance and retirement accounts) where the former spouse is a named beneficiary. Without a timely review of an estate plan and beneficiary designations, it may still be possible for the divorced spouse to receive some or all of the estate.

Changes in law and technology also have sparked a need to review old plans. For example, many older plans do not account for digital assets, online banking, social media, or cloud storage of documents and photographs. They also may not take into account current tax laws, which can have deleterious consequences.

Finally, estate planning is an opportunity to define goals and build toward them. When your goals change, the plan should reflect the new objectives.

Therefore, estate planning is not a one-time transaction. When circumstances change, the estate plan should be updated accordingly, and not left to deteriorate into something that is irrelevant or contrary to your needs and objectives.