When Should I Update My Estate Plan?
It’s a good feeling – finishing up something important that you have been meaning to do for years. That’s how our clients often feel after we finish signing their estate planning documents, whether it is a last will and testament and powers of attorney or a trust agreement and various trust funding documents. At the end of that meeting, clients sometimes ask me “how do I know when I should update my estate plan?” How do you know? Can’t you just stash those documents away for years to come?
I advise my client to review their estate planning in the following situations:
1. A “major life event” occurs
If there is a major change in your life, you may need to update your estate plan. When being blunt, I describe a “major life event” as when someone you love gets married, divorced, is born or dies. While it includes much more than this, it gives you an idea of what type of events to consider.
2. A big purchase or sale or other major asset change
If you have moved to a new state, you may need to update your estate planning documents to comply with the laws of the new state or to take advantage of differences in law. If you have a trust, you may also need to be sure title your new residence is in the name of your trust. If you have a will, you may want to consider a trust if you now own real property in more than one state. For business owners, a sale or change of control of the business may affect your estate plan. If you sell real estate and move the proceeds into investment accounts, beneficiary designations may impact what passes through your estate. This is just a short list. If you buy or sell something of significant value or change the status or nature of an investment, review of your estate plan is a good idea.
3. If it’s been more than five years
Time goes by faster than any of us care to admit. It is good to review your estate plan on a periodic basis. You would be surprised by the number of clients I hear say “I forgot my will said that …” or come to me with a will that was executed when their children were babies and now they have grandkids. In addition, financial institutions and investment brokerages are becoming stricter about how long they will recognize powers of attorney or certificates of trust. While the documents are legally still effective, the internal policies at some of these entities may require newer documents. Even if you don’t need to make changes, re-executing some documents may be a good idea.
The estate planning attorneys at Lynn Jackson are happy to sit down with you to discuss whether you need to make some changes to your existing estate planning documents or if you are still “good to go.” We look forward to hearing from you.