An estate plan isn’t something you create once and forget about. Life is constantly changing, and your estate plan needs to reflect those changes to ensure your assets are distributed according to your wishes. But how often should you review and update your estate plan? Let’s explore when and why you should make updates as life changes.
1. Regular Review: Every 3-5 Years
Even if no major life events have occurred, it’s essential to review your estate plan every 3 to 5 years. Over time, laws can change, and your financial situation might shift. A periodic review helps ensure your plan remains effective and up to date.
- Why: Tax laws, estate regulations, and even your personal financial goals may evolve. A regular review ensures that your plan is still optimized for your current circumstances.
2. After Major Life Changes
Significant life events can have a direct impact on your estate plan. It’s crucial to make updates after any of the following events to ensure your plan still aligns with your intentions:
- Marriage or Divorce: Changes in marital status may require updates to your beneficiaries, executor, or trustee.
- Birth or Adoption of Children: If you have a new child or grandchild, you may want to adjust your plan to provide for them.
- Death of a Beneficiary or Loved One: If a key person in your estate plan passes away, you’ll need to make updates to reflect this change.
- Significant Change in Financial Status: An increase or decrease in your wealth (such as an inheritance, sale of a business, or financial loss) might require modifications to your plan.
- Move to a New State: Estate laws vary from state to state, so moving can affect how your estate plan is executed.
3. Changes in Estate Planning Laws
Estate planning laws can change at the federal or state level, potentially affecting the taxation of your estate or the way your assets are distributed. A legal change could render parts of your plan ineffective or outdated.
- Why: If estate tax laws change or new regulations are introduced, failing to update your plan could result in unnecessary taxes or complications for your heirs.
4. Changes in Health
If your health or the health of a loved one changes, it’s a good idea to revisit your estate plan. Incapacity planning, including powers of attorney and healthcare directives, might need to be updated to reflect your current wishes.
- Why: If you become incapacitated and your estate plan isn’t properly updated, it could cause delays and confusion in managing your affairs.
5. Changes in Relationships
Your relationships with family members, friends, or business associates may change over time. If someone you’ve designated as a beneficiary, executor, or trustee is no longer the right choice, you’ll need to update your plan.
- Why: Estate plans often rely on personal relationships to work effectively. If those relationships shift, your plan may need to as well.
Conclusion: Stay Proactive
At a minimum, you should review your estate plan every 3 to 5 years. However, it’s just as important to update it whenever significant life events, changes in the law, or shifts in your relationships occur. Keeping your estate plan current helps ensure that your assets are handled according to your wishes and reduces the potential for conflicts or delays.
At Modern Law, we can help you review and update your estate plan to keep it aligned with your life changes. Contact us at 417-200-2500 to schedule an appointment at our Joplin or Springfield, Missouri offices.
Written by Jacob Adamson
Jacob Adamson is an experienced estate planning attorney at Modern Business & Estate Planning Law, LLC, helping individuals and families safeguard their legacies and navigate life’s changes with confidence.