Business•
on July 12th, 2013•
This week the Securities and Exchange Commission (SEC) approved new rules that will open the process of raising money for startup entities. This is a HUGE development and benefit for companies looking to gain investors and funding. Now, startups and other money-raising entities, like hedge funds and venture capital funds, will be able to publicly seek and advertise for investments through a process known as “general solicitation.”
For now, startups will be restricted to “angel investors” and will not be able to “crowdfund” (using such websites as kickstarter) from non-millionaires. The SEC is expected to issue rules regarding crowdfunding within the next year.
For more a deeper analysis, visit http://www.wired.com/business/2013/07/the-emerging-vc-machine/?cid=9730654.
Most people meet with their attorney, have estate planning documents drafted (wills, powers of attorney, livings wills, etc.), sign those documents into effect and then tend to consider their estate plan “done”, ceasing to think about it any further. At a bare minimum, you should always review your estate plan with your attorney and financial advisor upon either a major life occurrence (marriages, births, deaths, divorces) or once every five years.
Major Life Occurrences
A major life occurrence is obvious- marriages, births, deaths and divorces all significantly alter who your beneficiaries or heirs may be. You may have your (now) ex-wife listed as your Executrix of your will or your healthcare agent under your healthcare power of attorney. What happens if your ex-wife, who does not think too highly of you, is the one that gets to decide whether or not the plug is pulled? If you revisit your estate plan upon a major life occurrence, you can make the changes necessary to adequately handle your updated circumstances. If you did not have children when you first executed a will, but now you have one or more kids, it is a good idea to revisit your will to make sure that all of your estate is handled as you want it to be, including providing for your children’s collegiate funds, health and general welfare.
Another significant life change is the drastic increase of your financial assets. If your estate plan was very basic, intended just to handle your wishes without any tax planning, it will not help to save you tax dollars later on if your financial situation changes significantly. To address this type of issue, you can change your estate plan to include tax planning, to help save money for your estate (and your beneficiaries) after you pass.
Retirement
If you are nearing retirement, it is a good idea to revisit your estate plan and make sure that it is set up to adequately handle your retirement. When you retire, you cease “adding” to your estate and begin to instead take “income” from your retirement accounts and other assets you have accumulated. This change can drastically impact your estate plan.
Health Changes
Long-term medical care is extremely expensive. If you, or someone in your family, requires long-term medical care (or you think they might in the future), you can alter your estate plan to include special provisions to address this type of situation.
Five Year Rule
Even if you do not encounter any of the changes above, or do not anticipate any of these changes, it is still a good idea to revisit your estate plan with your attorney and financial advisor once every five years. Tax laws change, portfolio values and assets change, and your future goals (charitable giving, etc.) may change. You can update your estate plan to handle these changes.
The above situations are only a sampling of some changes that should encourage you to revisit your estate plan. If you think you may need to revisit your estate plan, please contact your attorney and financial advisor, who can review your estate plan and help make appropriate recommendations and changes for you.
