The first goal of an estate plan is to preserve the wealth you have accumulated during your lifetime. Next is to clearly define who’ll receive your assets after you die. And the third goal is to name the person and give control to the person who will make medical and financial decisions on your behalf in the event you’re unable to do so. With the passing of time, your feelings about your goals may change, and you might want to reconsider how you want to distribute your wealth.
The (Oak Creek AZ) Villager recently considered why it is so critical to review your estate plan every few years in a recent piece titled “Updating your estate plan—When should you review?”
Over the years, your personal and financial health, along with your outlook on life may change to a great degree. So it’s key to be aware of the life events that may necessitate an updated estate plan.
- Just married or divorced? If so, your estate plan will need revision, and if your children or grandchildren marry or divorce, that’s another call to your attorney.
- Any loss or serious illness within your family? If yes, your named executor or health care agent may need to be changed. Also, if a family member is now physically or financially dependent on you, that’s another reason to review your plan.
- Has your net worth changed a lot since created your plan? If you’re now wealthier (or much less wealthy), your ideas about how you want your assets distributed at your death may have changed. Maybe you want to give more to a favorite charity or to one of your heirs.
- Changed your mind about what you want your wealth to accomplish? You might think of your wealth differently than you did when you were in your 20s.
- Have your executors or trustees changed their mind about their roles? That can happen. If they’re no longer interested taking on the task, they’re passed away, or no longer have capacity, its revision time.
- Retired, moved to another state, or bought or sold real estate? A yes to any of these events means an estate plan review with your attorney.
First, when you revise your estate plan, you need to update essential documents. This includes not just your will or your trust, but also your financial power of attorney and health care proxy. The next step is to review your risk management. Perhaps a trust created long ago needs to be modified or swapped out. Check your life insurance beneficiary forms for any updating.
Third, be certain that your assets line up with your plan, such as transferring ownership of all those assets that are going into a revocable trust, as well as adding acquired new assets.
Even if there are no big changes in your life, review your plan every few years because tax laws, financial markets, and business climates can change significantly, which can affect your estate planning strategy.
Reference: (Oak Creek AZ) Villager (October 29, 2016) “Updating your estate plan—When should you review?”