If you’ve finally completed your estate plan, you may be feeling a sense of accomplishment. You’ve put your wishes in writing, and you’ve made sure your spouse, children, grandchildren, or other relatives have been taken care of. They will receive the money, property or other things you intended them to have after you pass.
Unfortunately, sometimes things don’t work out the way you planned. The rock-solid estate plan that you signed six months or a year ago may become outdated or obsolete because of variables you never expected.
Actually, an estate plan should be at least reviewed every three to five years. Annual reviews are a much better idea. Both tax laws and life change, so if your will, trusts, or other parts of your plan become obsolete, an obsolete estate plan could invalidate everything. Your well-laid intentions may turn into a long and expensive trip to probate court, leaving your beneficiaries without what you intended.
Life changes can also disrupt the execution of your estate plans. Should your documents for incapacity planning become outdated and don’t contain the appropriate language for HIPAA, your family will have to go to court to make decisions for you in the event you are incapacitated. This will defeat the purpose of having a plan in place.
When You Need To Review
Even if you are doing regular reviews of your estate plan, you should review and update your plan for:
- Marriage or divorce
- Birth or adoption of a new child or grandchild
- Guardians for children or grandchildren (particularly important if you have custody of grandchildren.)
- Disability and/or illness of your spouse
- Death of a beneficiary, executor or trustee
- Disinheriting a beneficiary
- Changes in the number of your dependents, i.e., caring for an adult (such as a parent) who has become dependent on you
- Career changes
- Receipt of an inheritance, either you or your spouse
- A move to a new state
- Buying or selling a home or other property (commercial building, vehicles, etc.)
- Buying or selling property in another state
- Buying, selling, reorganizing, or dissolving a business
- Updating beneficiaries
- Updating executor and/or trustees
- Asset changes (increases or decreases in assets like investments)
- Transfers into trusts
- Powers of attorney
- Healthcare directives (including healthcare power of attorney)
- Other changes in financial or legal status
In short, any life change that even indirectly affects your financial health and your estate plan should be taken into consideration and your will and other estate planning documents updated.
You’ve probably heard at least one story of a widowed spouse who did not receive anything from her husband’s will because he never updated it after his previous marriage. The best way to ensure that your surviving spouse and children receive what you intended is to review your will immediately and make changes as needed.
When was the last time you reviewed your will? If you can’t remember, it’s been too long. Now is the time to find it, read it and review it, and make an appointment with your estate planning attorney to update everything immediately.
If you’ve moved to a different state, you will need to work with an estate planning attorney in your new state of residence. For instance, an estate plan created in Mississippi will need to be re-created once you move to Illinois, since state law governs probate and estate law.
Additionally, if you’ve changed your mind about your choices for beneficiaries, trustees and executors, you should update your will as soon as possible. Otherwise, you will be leaving assets to someone you don’t want to, or have someone administering your assets who is no longer appropriate.
Do You Need To Update Your Estate Plan?
Reviewing your estate plan regularly ensures that your legacies are passed along according to your wishes. Your beneficiaries will receive what you intended easily, and you’ll have peace of mind that your family is provided for.
James C. Provenza is a leading Illinois estate planning attorney with years of experience helping clients with estate planning to make sure their wishes are carried out. Call our firm today at (847) 729-3939, or use our online contact form to make an appointment. We’ll help you decide which will fit best into your overall estate plan.