Recently, I’ve reviewed a lot of estate plans to see if they need to be updated. Many plans don’t need any adjustment, but more often than not, I suggest an updated document or slight revision that changes everyone. Now, without an attorney’s review, it’s hard to know if your documents would serve their purpose through incapacitation or death. However, there are a few times when it’s worth asking that attorney.
First, any major life change. A marriage, birth, divorce, or death. All are times when you should review your plan to make sure an update isn’t need to match the change in your life.
Also, rather obviously, is when you want different people to be in charge. Often times, a plan is created for young children and at some point those children grow up and are the best people to make decisions. Or family dynamics and relationships change and other loved ones would be better at decision making.
Another large part of a plan is asset titling. So as assets change, grow, and decrease, it’s also appropriate to adjust your plan based on those assets. Any time there’s been a lot of changes to your assets it would be smart to review your entire plan to make sure things still work the way you think they do.
Whenever I work with clients for a plan, I try and include contingencies for if a plan is not reviewed. However, I also tell clients to focus on the next five years. So, if you were thinking for the next five years, it makes sense to review a plan every five years. If there haven’t been any major life changes, relationship shifts, or much asset movement, then it may not be necessary. However, tax law does change frequently and it’s worth a quick check to make sure nothing new applies to you.
These are great guidelines on when you should be reviewing your estate plan and when to think about updating. But if you’re not sure what your plan says or how it works, it’s always a great time to review to make sure your plan does what you think it does.