Have you ever found yourself wondering when the right time is to review and update your estate plan? The answer might be simpler than you think. It usually comes down to the major life events that we all think of, but there can also be other signposts that you may encounter along the way.
One common misconception about wills and other estate planning documents is that they have an expiration date. Even if your will is 20 years old, if it's the last will you prepared, assuming it was properly drafted at the time, it's likely still valid even today. And if you think about where you were in life 20 years ago, you may quickly realize that your priorities from two decades ago are not your priorities today.
Even if there hasn't been a large life event or a long passage of time, it's important to stay engaged with the professionals you work with to understand if there have been legal or tax changes that could have an effect on what you've planned your legacy to be. It's not your job to keep track of all these changes, that's what you have professionals in your life to assist you with.
Remember, your estate plan is not a set-it-and-forget-it thing. Regular tweaks keep it effective and personalized to you. So, when's your next review?
When Should I Update My Will?
For each person, the answer to "when" should be when it truly makes sense for you. While I can give you guidelines on when most people need to consider updating their documents, ultimately, it will be up to you and your life circumstances for when you need to make some changes. Commonly, the triggers for a change to your estate plan documents are:
Major Life Events: Any significant life change, such as marriage, divorce, birth, or death in the family, should prompt an immediate review and potential update of your estate plan.
Financial Changes: If your financial situation undergoes substantial shifts, like acquiring new assets or experiencing significant losses, updating your estate plan ensures it aligns with your current financial standing.
Regular Review: It's advisable to review your estate plan periodically, even if there are no apparent changes in your life. This routine check helps identify any outdated information or legal requirements that may have evolved over time. I normally suggest to my clients that we review their plans at least once every 3 years after documents have been signed.
Legal and Tax Law Changes: Stay informed about alterations in laws related to estate planning and taxation. Legislative shifts may necessitate adjustments to ensure your plan remains compliant and optimized for tax efficiency. By the way, this isn't your job to keep up with all of the changes, this is why it's important to have a team of professional advisors to work with who will be doing that research for you.
Health Changes: If your health status changes, it's crucial to update directives in your estate plan, such as healthcare proxies and living wills, to reflect your current wishes and preferences. Updating your healthcare documents and powers of attorney is usually an easier process than amending a trust or drafting codicils for your will, so it's important to make sure you're updating these documents when your health changes.
These are just some common signals that you may run into, but there's no reason to wait until something glaring happens that tells you it's time to make an update to your will. If you're not sure if you need an update, you can always reach out to your attorney or financial advisor and ask them to give you a quick review. If you don't have someone to ask, you can even fill out a short Estate Planning Check Up on my website to get my quick view on whether you need an update to your estate plan documents (or if you've never had them drafted before, if now's the time to get them drafted).
Do You Need an Estate Plan?
If you need an estate plan or maybe just need to update one you had prepared before, let's schedule a Legal Strategy Session online or by calling my Edina, Minnesota office at (612) 294-6982 or my New York City office at (646) 847-3560. My office will be happy to find a convenient time for us to have a phone call to review the best options and next steps for you to work with an estate planning attorney to get your plan prepared and implemented.