Once you have created your estate plan, revisiting it at regular intervals or key life events is a good idea. Life changes, laws change, and your estate plan should evolve, too. Updating your estate plan ensures that your intentions are clear and legally sound, providing peace of mind to you and your loved ones. This blog covers the importance of an estate plan review, when and how often to review it, and scenarios that might prompt a change.
Why is Updating Your Estate Plan Important?
Updating your estate plan ensures that your wishes are accurately reflected in light of any changes in your personal circumstances, legal statutes, or financial situation. Without updates, you risk having an estate plan that might not work as you intended when it’s needed most, potentially leading to family disputes, legal hurdles, and unintended financial consequences.
When and How Often to Review Your Estate Plan
As a general rule, it’s wise to review your estate plan every three to five years. However, it should be reviewed sooner if significant life or legal changes occur. This regular review helps catch any aspects of the plan that might be outdated due to changes in your life or the law.
Key Scenarios for Estate Plan Review
Certain life events make it essential to review and potentially revise your estate plan:
- Family Changes: Marriage, divorce, the birth or adoption of a child, or the death of a family member are all significant events that should trigger an estate plan review. For example, you may need to update beneficiaries, guardians for minor children, or instructions for the distribution of your assets.
- Financial Changes: Significant increases or decreases in your assets should prompt a review of your estate plan. This includes acquiring or selling major assets like a home or business, receiving an inheritance, or significant changes in the value of your investment portfolio.
- Relocation: Moving to a different state or country can affect your estate plan due to varying laws governing estates and taxes. It’s important to ensure your plan conforms to the laws of your new residence.
- Changes in Relationships: Changes in your relationships, such as a fallout with a family member or a new marriage in the family, might influence how you want your assets distributed or who you want to make decisions on your behalf.
- Tax Law Modifications: Changes in federal or state tax laws may affect various aspects of your estate plan, especially those related to the financial strategies designed to minimize your estate’s tax burden.
- Health Changes: Significant changes in your health or that of your spouse/partner might necessitate adjustments to your powers of attorney or living wills, ensuring that the right people are in place to make decisions if you’re unable to do so yourself.
How to Review Your Estate Plan
Reviewing your estate plan doesn’t have to be a daunting task. It can be as simple as sitting down with your estate planning attorney to go over current documents and discuss any changes in your life or the law that could affect your estate. Your attorney can help identify any gaps in your plan and recommend updates to carry out your wishes.
An outdated estate plan can undermine your intentions and expose your family to lengthy and costly legal proceedings. Keeping your estate plan updated will ensure that your wishes are honored and your loved ones are protected.
At DaMore Law, we are here to help you maintain an estate plan that effectively reflects your current wishes and circumstances. Our team provides personalized service to tailor your estate plan to your unique family situation and financial landscape. If you’re looking to update your estate plan, or just starting the planning process, contact us for a free consultation. Let us help you secure your legacy and give you peace of mind knowing your estate is in good hands.