Six Signs It Might Be Time to Update Your Estate Plan

You were proactive and established an estate plan. Now what? How do you know when you should update it? While there is not a one-size-fits-all approach, there are some key signals to look out for that may indicate it is time to dust off the estate plan sitting in your filing cabinet.  Here are six signs it may be time to update your estate plan:

1. A major life event occurs.  

A major life event can include a lot of things, but here are some examples:

• You or a loved one gets married, divorced, or remarried. 

• You have children or grandchildren. 

• A loved one passes away or becomes disabled.

Oftentimes, estate plans incorporate specific language to help you avoid the need to update your estate plan when inevitable life events occur.  Nevertheless, if you experience a major life event, you should contact an attorney to advise as to whether or not such event warrants an update to your estate plan. 

2. Substantial change in assets.

Your estate planning needs may have changed because you may have experienced a substantial change in assets, either because of a substantial increase in the worth of your assets or because the makeup of your assets has changed.  For instance, you started a business, you received an inheritance, or you acquired real property in another state.  

For example, if you buy a lake cabin or vacation home in a different state, a Trust plan versus a Will plan would likely serve your needs better.  Tax planning may also become important if you have experienced a substantial increase in the worth of your assets.  And, if you started a business, it is important your business formation documents complement your estate plan, as business succession planning goes hand-in-hand with estate planning. 

3. Individuals appointed to roles die or relationships change.

Within your estate plan, you likely have people or institutions appointed to various roles.  These roles often include a Personal Representative (a/k/a Executor), Trustee, Agent, Guardian for your minor children, and successors for each position, among others.  Since you first executed your estate plan, these individuals may have passed away, moved away, or a relationship may have soured. 

For instance, maybe you initially named your parents as the Guardians for your minor children; however, now that they have gotten older and your brother has started a family of his own, you would prefer your brother be the Guardian of your minor children. Or, maybe you initially named your sister as your Personal Representative or Agent, but she has moved away making that appointment not as practical. Or, perhaps, you had a friend appointed as successor Trustee after your death, but now that your children have grown up, you would prefer to appoint your children as successor Trustees. There are endless reasons why you may want to change the appointments for these important roles, and you should review them to ensure you have the right people in place.

4. You move to another state. 

If you executed your estate plan in one state but then move to another state, you should contact a local attorney to review your estate plan to ensure it complies with that state’s laws and to apprise you of any state law that may affect your estate plan. 

5. Your desires change.

The most straightforward reason to update your estate plan is that your desires change.  Estate plans are very customizable to your wants and needs. And with the passage of time, those wants and needs will likely change as life changes.  

For instance, your children may be well into their adulthood and financially literate, so you may decide to leave property to them outright rather than in trust. Or, on the flip side, your children may have proven to be financially irresponsible or prone to creditor issues, so you may wish to hold property for your children in trust for their lifetimes.  Perhaps your children may be self-sufficient, so you may wish to leave some property to your grandchildren or make charitable gifts.  Or, maybe you have a child or grandchild who has developed special needs, so you want to explore incorporating special needs planning into your estate plan.

6. Passage of time. 

As a good rule of thumb, you should review your estate plan every three to five years to ensure it still reflects your intentions and still operates as you think it does based on potential changes in the law.  End of life planning is not most people’s favorite pastime, but the best way to ensure it reflects your intentions is by regularly reviewing it. Contact an estate planning attorney to assist you with understanding the intricacies of your estate plan and identify any potential updates that would further your goals.