An estate plan is the guide to how you want your personal and financial affairs to be handled in the event of your incapacity or death. As life changes, your guide changes with it.
Due to its importance, we recommend you periodically review your estate planning documents and discuss your situation with an estate planning attorney.
The question often asked is: When should I review my documents?
Once a legal document is prepared and executed, it is often placed in a safe deposit box or file drawer and is viewed again only when a party dies or a difficulty arises. Although there are no formal rules as to when to revisit your estate planning documents, a quick review each year is a wise choice. Every five years or more a thorough review can be performed.
Sometimes changes in your life will trigger a review. Major life events can be related to:
• Substantial change in estate size
• Move to another state and/or acquisition of property in another state
• Purchasing a home or other large asset
• Taking on a large amount of debt
• Death of an executor, trustee or guardian
• Birth or adoption/children or grandchildren
• Serious illness of a family member
• Change in business interests
• Career changes/new job/promotion
• Change in health
• Change in insurability for life insurance
• Changes in tax, property, or probate and trust law
• Changes in the attitude of your beneficiaries
• Children reaching age of majority
• Receiving an inheritance or gift
• Financial irresponsibility of a spouse or child
During the review you may want to think about some topics such as:
• Who are your family members and friends and how are things between you? How are their lives progressing? Do they have special needs?
• Do you have children from a previous marriage?
• Are your documents valid? Is your choice of executor, guardian, or trustee still appropriate?
• Do you have a valid living will, durable power of attorney for healthcare, or do-not-resuscitate order to manage your health care in case you are not able to do so?
• Do you need to plan for the impact of Medicaid on your financial needs?
• Do your beneficiary designations reflect your current wishes? Retirement plans, annuities, payable-on-death bank accounts, and life insurance pass according to those designations, so it is important to keep them up to date.
• You will want to review how your property is titled. Property owned jointly with rights of survivorship passes automatically to the surviving owner(s) at your death.
• If you have charitable intentions, are they reflected in your documents?
• Do you own a business interest? Have you started your succession plans? Is there a buy-sell agreement with proper funding?
• Are your trusts up to date and do they reflect your wishes? Property held in trust passes to beneficiaries according to the terms of the trust. These can be used to protect assets and help manage them for heirs that are young or inexperienced at doing so.
• Do you own sufficient life insurance? How recently have your insurance needs been evaluated?
• Do any recent estate, gift, generation-skipping, and income tax law changes impact you? Make sure to consider the state taxes as well as the federal.