Reasons to Update Your Estate Plan
I recently listened to a podcast discussing the reasons to update your estate plan. When administering an estate, it is not unusual for me to see plans that have not been updated for decades. So what are some reasons to update your estate plan?
You move to a new state. While your will or trust may still be valid, other documents can be much more state specific, such as the living will or power of attorney. This is always a good time to review your plan.
You get divorced. While many states have laws to address divorce in regards to inheritance, there are often other issues, such as who you have named as a fiduciary. This is always a good time to review your plan.
If a named fiduciary, such as a trustee, has died, become incapacitated, or just doesn’t make sense any more. This is always a good time to review your plan.
If you are gifting or selling a business. This is always a good time to review your plan.
A minor child becomes an adult. Often parents of minor children have set specific age requirement for when a child can inherit. As a child reaches that age it is always a good time to review the plan to determine if that decision still makes sense.
Your estate plan documents are tools to help you accomplish your goals and objectives in estate planning. Like most tools, however, maintenance and upkeep is necessary for the tool to work when you need it. This maintenance and upkeep occurs through periodic review of the plan. Updates to the documents should happen whenever there has been a change in your personal circumstances, your financial situation, or the law. A change in personal circumstance could include the death, divorce, re-marriage, or disability of a person named in your planning such as your trustee, your agent under a power of attorney, your personal representative, or a beneficiary. The death of a spouse of one of the foregoing may also trigger the need for a review. Depending on the type of plan, I recommend that a review occur at least every three to five years to ensure that your wishes are still being met by the plan. This is also an opportunity to review the funding of assets into a Trust. Assets without proper beneficiary designation or not properly transferred into the Trust prior to death or the onset of incapacity may be subject to probate or conservatorship proceedings and may not pass to a desired beneficiary. This can mean unintended consequences that are negative and potentially costly.
If you have not had your plan reviewed in the last five years you should get that review scheduled now.
This post is for informational purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Nothing herein creates an attorney-client relationship between Hallock & Hallock and the reader.