7 Events That Trigger a Review of Your Estate Plan

How long is my estate plan good for? This is one of the most frequently asked questions if you’ve already created an estate plan. From one point of view, your plan is good until you either revoke or decide to change it. A different point of view treats your estate plan as a living document that should be adjusted and modified as different life events occur.

No matter who you are, your life will inevitably change: families change, laws change, assets change, and goals change. Estate planning is not a one-and-done type of deal: It should continuously evolve along with your life circumstances. In the absence of any major life events, we recommend reviewing your plan every 3 years to make sure its terms are up to date. Even if you put a totally solid estate plan in place, it can end up proving worthless if it’s not properly updated or funded.

There are several common life events that require you to immediately update your plan—that is, if you want it to actually work and keep your loved ones out of court and out of conflict. To this end, if any of the following seven events occur, contact us right away.

1) You get married: Not only does marriage change your relationship status, it also changes your legal status. Regardless of whether it’s your first marriage or fifth, you must take the proper steps to ensure your plan properly reflects your current wishes and needs.

After getting married, some of your most pressing concerns include: naming your new spouse as a beneficiary on your insurance policies and retirement accounts, granting him or her medical power of attorney and/or durable power of attorney (if that’s your wish), and adding him or her to your will and/or trust. What if you already have a trust and change your name? You may have to retitle some assets.

2) You get divorced: Since divorce can be overwhelming, estate planning often gets overshadowed by the other dramatic new changes happening. But failing to update your plan after divorce can have devastating consequences.

Once divorce proceedings start, you’ll need to ensure your future ex is no longer eligible to receive any of your assets or make financial and medical decisions on your behalf—unless that’s your wish. Once the divorce is finalized and your property is divided, you’ll need to adjust your planning to match your new asset profile and living situation.

One other thing, once the divorce decree is signed, the beneficiary designations on life insurance policies, if the former spouse is named, are automatically nullified.

3) You give birth or adopt: Welcoming a new addition to your family can be a joyous occasion, but it also demands entirely new levels of planning and responsibility. At the top of your to-do list should be legally naming both long and short-term guardians for your child. Our mission is to help more families plan for the future, so we have put in place a kids plan to help you appoint guardians for FREE. If you have minor children and have not done this yet, click here to get more information.

After naming guardians, consider putting planning structures, such as trusts, in place for your kids. Planning structures will assure that your children benefit from the assets placed into the structure. Consult with us to learn which planning strategies are best suited for your family.

4) A loved one dies: The death of a family member, partner, or close friend can have major consequences for both your life and estate plan. If the person was included in your plan, you need to update it accordingly to fill any gaps his or her absence creates. From naming new beneficiaries, executors, and guardians to identifying new heirs to receive assets allocated to the deceased, make sure you address all voids the death creates as soon as possible.

5) You get seriously ill or injured: As with death, illness and injury are an unavoidable part of being human. If you’ve been diagnosed with a serious illness or are involved in a life-changing accident, you may want to review the people you’ve chosen to handle your healthcare decisions as well as how those decisions should be made. The person you want as your healthcare proxy can change with time, so be sure your plan reflects your current wishes.

6) You relocate to a new state: Estate planning laws can vary widely from state to state. If you move to a different state, you’ll need to review and possibly revise your plan to comply with your new home’s legal requirements. Some of these laws can be complex, so consult with your trusted attorney to make sure your plan will still work exactly as you desire in your new location.

7) Your assets or liabilities change significantly: Whenever your estate’s value dramatically increases or decreases, you should revisit your plan to ensure it still offers the maximum protection and benefits for yourself and your loved ones. Whether you inherit a fortune, take out a new loan, close your business, or change your investment portfolio, your plan should be adjusted accordingly. This is also important when tax laws changed as they can increase or decrease the exclusion limit.

If you have checked off the “get estate plan done” box on your life’s to-do list, you can now feel accomplished for checking another thing off the never-ending list. But before you move onto the next item in your to-do list, add in a reminder to have your estate plan reviewed within the next three years. If you work with us, we will automatically calendar a three year review of your plan the day after you’ve signed it.

Count on us for guidance and support
You can count on us as your trusted advisor to ensure your estate plan is regularly reviewed and updated at all times. In fact, we have built-in processes to make sure this happens—be sure to ask us about them.

What’s more, rather than looking at the process as yet another task you have to accomplish, we view an annual review as a meaningful ritual that lets you see where your family has been and where you plan to go. A regular review will put you at ease, knowing your family is protected and provided for no matter what happens.