How Often Should I Review My Estate Plan?

When you first create an estate plan, it’s like building a strong foundation for your family’s future. You carefully consider your assets, think about your loved ones, and work with your estate planning attorney to ensure everything is in place to make things easier on the people you love most. However, as life goes on, things change—sometimes unexpectedly—and those initial decisions may no longer align with your current situation or wishes. One of the most common reasons why estate plans fail is because they are not regularly maintained or updated. This is why regular reviews with your estate planning attorney are crucial.

Why Estate Plans Need Regular Reviews

Estate planning is not a one-and-done task. It’s a dynamic process that requires ongoing attention. Here’s why:

1. Changes in Personal Circumstances

Life is full of surprises, and many of them can significantly impact your estate plan. For example:

Marriage or Divorce: If you get married or divorced, your estate plan needs to reflect these changes. You may want to add or remove a spouse from your will, trust, or beneficiary designations.
Birth or Adoption of a Child: Welcoming a new child into your family means ensuring they are provided for in your estate plan. This could involve naming guardians, setting up trusts, or adjusting inheritance plans.
Changes in Financial Situation: A significant increase or decrease in wealth can necessitate adjustments to your estate plan. This includes acquiring new assets, selling property, or receiving an inheritance.

These changes, if not reflected in your estate plan, can lead to unintended consequences. For instance, failing to update your estate plan after a divorce might result in your ex-spouse inheriting assets you would prefer to go to your children or other family members.

2. Changes in the Law

Estate planning laws are not static; they evolve over time. Tax laws, inheritance laws, and regulations surrounding trusts and estates can all change. What might have been a sound estate plan a few years ago could be outdated or even problematic under current laws.

For example, changes in federal estate tax laws could impact whether your estate is subject to taxes and to what extent. Without regular reviews, you might miss opportunities to minimize tax liabilities or protect your assets under the new regulations. Additionally, an old plan could have tax planning “baked in” that results in a tax problem because of a change in laws. So, just because laws become more favorable doesn’t mean that changes don’t need to be made to take advantage of them.

An estate planning attorney stays informed about these legal changes and can advise you on how they affect your plan. Regular reviews ensure your estate plan remains compliant with the law and continues to serve your best interests.

3. Changes in Relationships

Relationships evolve over time. You might become closer to some family members, while others drift apart. You may also experience the loss of a loved one or have a falling out with someone you once trusted to manage your affairs.

These shifts in relationships should be reflected in your estate plan. If you’ve named someone as a beneficiary, executor or personal representative, or trustee, but your relationship with that person has changed, you’ll want to reassess those decisions. Similarly, if a person you’ve named in your estate plan passes away, you’ll need to update your documents to reflect a new choice.

4. Emerging Health Concerns

Health issues can arise at any time, and they may affect your estate planning needs. For instance, if you or a loved one is diagnosed with a serious illness or a condition that affects decision-making capacity, you may need to update your healthcare directives or power of attorney documents.

Additionally, if you or your spouse require long-term care, it’s essential to plan for how these costs will be managed. Updating your estate plan to include provisions for long-term care can help protect your assets and ensure you receive the care you need.

The Consequences of an Outdated Estate Plan

Failing to keep your estate plan up to date can have serious consequences. Some of the most common pitfalls include:

Assets Not Passing to Intended Beneficiaries: If your estate plan is outdated, assets may go to people you no longer wish to benefit, or they may bypass those you want to protect.
Increased Tax Burdens: Outdated plans might not take advantage of current tax-saving opportunities, leading to unnecessary taxes and reducing the inheritance your loved ones receive.
Family Disputes: When an estate plan doesn’t reflect your current wishes or circumstances, it can lead to confusion and conflict among your heirs. This is particularly true if the plan leaves room for interpretation or if significant changes (like a divorce or remarriage) aren’t accounted for.
Probate and Estate Administration Complications: An outdated estate plan might not avoid probate as effectively as possible. Probate is often a time-consuming and expensive process, and without proper planning, it can unnecessarily erode the value of your estate.

When to Schedule a Review

You might wonder how often you should review your estate plan with your attorney. In our office, we want to review estate plans every 3 years with our clients. However, you should also schedule a review any time there’s a significant change in your life or the law.

Events that should prompt an immediate review include:

Marriage, divorce, or remarriage
Birth or adoption of a child or grandchild
Significant changes in financial circumstances
The death of a spouse, child, or other close family member
Changes in your health or the health of a spouse

Even if there’s nothing specific on the horizon, regular check-ins with your estate planning attorney are a good practice. These meetings allow you to address any minor changes that might have slipped your mind and ensure that your plan continues to meet your goals. Oh, and there is nothing magical about “3,” but after 3 years there will likely be changes in the law and potentially changes in circumstances. Discussions with an estate planning attorney surrounding such changes may result in action items such as plan revisions, but regardless, these conversations provide you with peace of mind.

Don’t Wait – Ask Questions

Life doesn’t always follow a neat timeline, and unexpected events can occur between scheduled reviews. If something happens before your next review date, don’t wait—reach out to your estate planning attorney immediately. Whether it’s a sudden illness, an unexpected financial windfall, or a change in your family situation, it’s better to ask the question and get the guidance you need rather than risk your estate plan becoming outdated.

Conclusion

Your estate plan is a living document that should evolve as your life does. Regular reviews with your estate planning attorney are essential to ensure your plan remains effective and aligned with your wishes. By staying proactive and keeping your plan up to date, you can avoid many common pitfalls and ensure that your life’s work is preserved for your loved ones. Remember, if anything changes before your scheduled review, don’t hesitate to contact your attorney and discuss how it might impact your estate plan. Your future self—and your family—will thank you for it.