Many people think of estate planning as a one-time task. You meet with an attorney, sign the documents, put everything in a safe place, and check it off the to-do list. But life rarely stands still. Families grow, relationships evolve, assets change, and the people you’ve chosen to carry out your wishes may no longer be the right fit. That’s why it’s important to review your estate plan after major life events and periodically in between. The most effective estate plan reflects the life you’re living today, not the one you had years ago.
Life events that should prompt a review.
- Marriage, divorce, or the loss of a spouse: These events can significantly affect how you want assets distributed and who you want to make financial or healthcare decisions on your behalf.
- The birth or adoption of a child or grandchild: You may want to update beneficiary designations, add provisions for younger family members, or revisit guardianship arrangements for minor children.
- A significant change in your financial situation: Milestones such as selling a business, receiving an inheritance, purchasing investment property, or accumulating additional assets may warrant updates to your estate planning documents.
- Relocating to a new state: Estate laws vary from state to state, and documents that worked well in one location may not be ideal in another.
- Changes in charitable interests: If the causes that are meaningful to you now are different from those you supported in the past, your estate plan should be updated to reflect that.
Reviewing core documents.
- Last Will and Testament: Your will should document your current wishes regarding the distribution of assets, guardianship provisions, and any charitable intentions. If family relationships or financial circumstances have changed, confirm that your will is written to accomplish what you want it to.
- Financial Power of Attorney and Healthcare Directives: The individuals named in these roles should be people you trust, who are willing to serve, and who are still able to act if needed.
- Trust (if you have one): Review both the terms of the trust and the assets held inside it. A trust can only work as intended when it is properly funded and coordinated with the rest of your financial life.
Don’t forget beneficiary designations.
One of the most common estate planning mistakes is neglecting to update beneficiary designations. Retirement accounts, life insurance policies, and certain annuities generally pass to the named beneficiary. In many cases, those designations override instructions contained in the will. Take time to confirm that your primary and contingent beneficiaries are current. Make sure former spouses, deceased individuals, or outdated designations have not remained on accounts unintentionally.
Review the people you’ve chosen.
Reviewing who is responsible for carrying out your estate plan is equally important. Executors, trustees, powers of attorney, and healthcare agents all play important roles. Over time, circumstances change. Someone who was the obvious choice years ago may have moved away, had health challenges, or is no longer the ideal fit. Periodically reviewing these appointments helps make sure the right people are in place when needed.
Keep up with changes in tax law.
Changes in tax laws can also affect your estate planning strategy. Federal estate tax exemptions, income tax rules, and capital gains provisions evolve over time. It helps to work with advisors who can identify opportunities and potential issues before they become problems because of new legislation.
Your estate plan should reflect who you are today. If you’ve experienced a major life event, or if it’s been several years since you last reviewed your documents, it may be time for a conversation. A thoughtful review can help make certain your wishes remain current, your loved ones are protected, and your plan continues to function how you’d like it to.
Frequently asked questions.
How often should I review my estate plan?
Even if no major life events occur, reviewing your estate plan every three to five years is a good rule of thumb.
What life events should prompt an estate plan review?
Marriage, divorce, the birth or adoption of a child or grandchild, the death of a loved one, a significant change in assets, a move to a new state, or changes in your charitable goals are all good reasons to revisit your estate plan.
Are beneficiary designations part of my estate plan?
Yes. Beneficiary designations on retirement accounts, life insurance policies, and certain annuities play an important role in your overall estate plan. These designations determine who receives the assets, regardless of what your will says.
If my estate plan is already in place, do I need to meet with an attorney every time to review it?
Not necessarily. However, if you’ve experienced a major life event, accumulated significant assets, moved to a new state, or need to make updates, consulting with an estate planning attorney may be appropriate.
Disclaimer: The information above is for general educational purposes only and should not be considered financial, tax, or legal advice. Always consult with a qualified professional regarding your specific situation. You should consult with your CPA and/or attorney before implementing any estate planning, gifting, or tax-related strategy.