Knowing When to Review and Revise Your Estate Plan

A common mistake people make is waiting to create an estate plan because they believe they are too young or lack sufficient assets to warrant a plan. The truth is that every adult can benefit from having a basic estate plan in place regardless of age, wealth, or family status. At a bare minimum, a basic estate plan prevents you from leaving behind an intestate estate if something happens to you.

Another mistake people often make is to create an estate plan and then forget about it. As your estate and your family grow, so should your estate plan. With that in mind, it is a good idea to conduct routine reviews of your estate plan. A good rule of thumb is to schedule a review every three to five years during your working years. Once you reach retirement age, you can extend that to every five to seven years unless an important event occurs that dictates a more immediate review.

Along with taking the time to update your estate plan every so often as a matter of course, there are certain life events that should prompt an immediate review of your plan, such as:

• • Marriage
  • Divorce
  • Death or incapacity of a beneficiary or fiduciary
  • Relocation to a different state or country
  • Child reaching the age of majority
  • Major change in assets
  • Serious illness

No. A properly drafted estate plan should allow for a certain amount of change in your asset portfolio. As such, you should not need to revise a Will or trust every time your asset portfolio changes. You may, however, want to update ancillary documents, such as an asset list, when you buy or sell an asset. In addition, if there is a substantial change to your asset portfolio, you should contact your estate planning attorney to discuss the need to update your estate plan.

Divorce is among the most common life events triggering the need to update your estate plan. Unfortunately, people are often focused on the emotional and practical implications of a divorce and fail to consider the need to update an estate plan.

Failing to review your estate plan, however, could leave your former spouse as the administrator of your estate, the Trustee of a trust, and/or a beneficiary of your estate. If you have an advance directive in place, your former spouse could also wind-up making healthcare decisions for you if you become incapacitated long after your divorce. Be sure to consult with your estate planning attorney before revising your estate plan during a divorce though because the terms of your divorce could impact those changes.

Along with any specific concerns that prompted you to review your estate plan, anytime you review your plan you should pay attention to some areas that often need updating, including:

• Beneficiaries. There may be additional children or grandchildren to add or charities to add/delete.
• Fiduciaries. Make sure that your current fiduciaries are still willing and able to serve and that they are the people you want in those roles.
• Distribution of assets. Changes in your family, your assets, and your feelings can create the need to make changes to how your assets are to be distributed after you are gone.
• Incapacity planning tools. Make sure that advance directives and trust agreements are in place to provide direction in case you suffer a period of incapacity.
• Funeral planning. Because our wishes can change over time, make sure that your wishes regarding your funeral and burial are made clear within your estate plan.
• Retirement planning. Always confirm that your retirement plan works in harmony with your estate plan.