Creating an estate plan is an important step in protecting your family, managing your assets and ensuring that your wishes are followed after you’re gone. However, estate planning is not a one-time task. As your life changes, your estate plan should change with it.
An outdated estate plan can cause unnecessary complications for your loved ones, put important decisions in the wrong hands or distribute your property in ways you no longer intend. But how often should you review your estate plan, and what should you look for?
What happens if you never update your estate plan?
An outdated estate plan doesn’t become invalid just because it’s old. However, it may no longer accomplish what you intended and could lead to unfortunate consequences.
Your will may name an executor who has died, or outdated beneficiary designations may direct insurance or retirement benefits to an unintended recipient. Inadequate planning for incapacity may leave loved ones facing additional legal steps to manage your affairs.
Regular reviews help ensure that your plan continues to reflect your wishes and that the people you have chosen to carry them out are still appropriate.
Life changes that warrant a review
No one review schedule works for everyone, but a reasonable benchmark is to review your estate plan every three to five years. Some circumstances deserve particular attention, such as:
- Marriage, divorce or remarriage
- The birth or adoption of a child or grandchild
- Significant changes in your finances
- Changes in family relationships
- Death of an executor, power of attorney or beneficiary
- Moving to another state
- Changes in tax laws
- Changes in estate planning goals
Your estate plan should reflect your life today — not your circumstances when you first created it. Reviewing your will, trusts, beneficiary designations, powers of attorney and health care documents can help ensure that your arrangements remain consistent with your wishes and goals.