“Going through the process of financial planning and estate planning, many issues come to light. In a well-executed financial plan, no stone in your personal life should be left unturned or unexamined.”
Your financial and estate plans can easily become out-of-date. Your situation may have changed, since the analysis and recommendations in your plan were made. It may be that some facts have changed, your health has deteriorated, or your vision for the future has changed.
The Smyrna-Clayton Sun-Times reports in its article, “Change plan as plans change,” that most financial plans begin as a snapshot of your financial life, with a thorough review of your assets, liabilities, and cash flow.
Your estate planning attorney will then use this to show what your financial life may look like, under a wide range of future scenarios. However, when it comes to forecasting numbers and assumptions, it’s not uncommon for things to turn out differently than planned. You need to recalibrate your planning based on your situation, as well as where the markets and your circumstances are heading.
For example, most people set their 401(k) allocations and name beneficiaries when enrolling in the plan and never look at it again. This also happens with life, property and casualty insurance policies. The renewal notices arrive in the mail when your policy is renewed, but do you actually read them? You should review every property and casualty renewal to be sure your coverage selections are adequate. Don’t assume that the renewal has the same exact coverage as last year, or that it was the right amount of coverage. Review your beneficiary designations every time you pay your life insurance bill.
In the same fashion, estate plans are rarely reviewed yearly. However, there are parts of your estate plan that may be worthless, if they’re too old. There may also be new opportunities that you are missing.
Your health care powers of attorney or a durable power of attorney should be examined every few years or as changes in your life occur that require revisions to these documents. Make an appointment to visit with your estate planning attorney to be sure you and your family are properly protected.
Reference: Smyrna-Clayton (DE) Sun-Times (April 17, 2018) “Change plan as plans change”