An estate plan is never really "finalized." As your life, relationships, and the law change, your estate plan needs to change too. How often should you review your plan? And when is the right time to update it?
Generally, you should review your estate plan once every 2-3 years. This probably will not correspond to how often you need to make an update, but it will decrease the likelihood that a necessary update is missed for very long. Most estate plans need an update every decade or so.
How do you know it's the right time for an update? Consider the following factors:
Has the law changed since you created your plan?
You may or may not be in a good position to answer this question by yourself. Unless you have made a hobby of tracking changes in federal and state laws related to estates, trusts, taxes, retirement assets, asset protection, business succession, etc, etc, etc, you probably have no idea whether the law has changed in ways that impact your plan. So it's a good idea to make sure your review process starts by contacting an estate planning attorney who DOES make a habit of tracking those changes.
For instance, in the last decade alone, Congress had passed laws that have drastically overhauled how we think about inherited retirement plans, estate taxes, and asset protection. And there are potential changes that may fundamentally change how important assets - like family land, farms, and ranches - are taxed upon death.
Usually, there are ways protect your assets against the more negative effects of these law changes, but only if your plan is regularly updated.
Have any of your key relationships - with family, guardians, trustees, medical proxies - changed since you created your plan?
Only you can know whether your relationships have changed in ways that have strengthened or broken trust with key personalities in your estate plan. Sometimes these changes are sudden, but often the change takes place gradually. If you aren't reviewing your plan regularly, you may not even be aware of all the ways your estate plan may be influenced by these relational shifts.
It is important to include frank conversations about your relationships as part of your review process.
Have any of your goals changed since you created your plan?
When you created your plan, your goals were reflections of your values, relationships, and assets that existed at that time. Some of those goals may have heavily depended on the ages and health of your children at the time, the values of your assets, whether or not you were already retired, or any number of other factors. Over time, these things change. Your children grow older. Your assets increase (or decrease) in value. You retire. Along with these new circumstances come new goals and shifts in values.
These shifts in goals are normal and should be expected, but they need to be accounted for in your plan.
Have you acquired any new assets since you created your plan?
While your estate plan SHOULD account for acquiring new assets in the future, there still may be important administrative tasks that help ensure those new assets are property integrated into your plan.
Did you finally purchase that lake house or cabin you've been dreaming about? You may need to deed it to your trust. Did you get a new life insurance policy? You may need to make sure your beneficiary designations are consistent with your planning goals. Did you change financial advisors? You may need to confirm that ownership or beneficiary designations are correct, especially when your goals include tax efficiency and asset protection.
Have you moved to or from a state that has significantly different estate planning laws since you create your plan?
As with changes in the law, you may not be in a position to understand whether differences between state laws are applicable to your planning. For this reason, it's always a good idea to meet with an estate planning attorney to discuss whether your new state differs significantly from your old state, and whether those differences matter in light of your planning goals.
Schedule Your Review
It costs nothing to schedule an estate plan review, and we can meet in person, via video chat, or by phone. We'll use that conversation to find out more about you and your priorities and to educate you about your options. To get started, call us at (918) 770-8940, or send an email to firstname.lastname@example.org.
Disclaimer: Reading this blog post does not create an attorney-client relationship, and it is not formal legal advice. This is for information purposes only. It is always best to speak with an attorney about your questions, assets, concerns, and needs.