After creating your estate plan, you, like many people, might have filed it away without giving it a second thought. You might have believed its provisions would hold up throughout your lifetime. Yet, changes in your relationships, health, residency and to your assets may make you wonder whether it is time to update it.
Even when there are no major changes in your life, you will want to do your best to keep your estate plan current. But there are certain occasions that make reviewing and revising it imperative, and it is important to know when these are.
Accounting for changes
For better or for worse, you will likely experience changes in your relationships over the years. Some of these may be positive and could require you to add beneficiaries to your estate plan. Yet, others may lead you to disinherit those who you are no longer close with – or to omit those who are no longer living. To make sure your assets end up in the right hands, it is crucial that you update your estate plan if:
- You get married, divorced or remarried
- A beneficiary gets married, divorced or remarried
- You become a parent or grandparent
- Your executor or a beneficiary passes away
- You become estranged from your executor or from a beneficiary
- Your health changes, such that you may need healthcare now or in the near future
- You retire
You may also want to update your estate plan if one of your beneficiaries has experienced hardships. They might have developed an addiction or are going through financial or health issues. In these cases, you must account for their unique situation as you determine how to pass on your assets to them, as well as the share that they will receive.
Furthermore, you want to make sure all your assets reflect your current estate plan which means assuring that all assets with beneficiary designations are updated to match your current estate plan. And especially if your estate is substantial, you will want to update your plan when federal and state tax codes change. Failing to do so could increase your estate’s tax burden, causing it to lose value down the road.
Accounting for time
There may be periods in your life where no major events or changes happen. Yet, you will still want to review your estate plan during these times as a precaution. Looking it over every three to five years will help you make sure its provisions still reflect your intentions and the current laws in your state.
Whenever you update your estate plan, you will want to make sure that your changes are binding, sound and valid. An estate planning attorney can help you review them to ensure that they will preserve your legacy and have planned for any long term care needs you may have.