If you already have your will, trust, and other estate planning documents in place, you’ve taken an important step toward ensuring your wishes are honored in the event of death or incapacity. However, it’s important to recognize that these documents are not static. To remain effective, your estate plan should be reviewed at least every three years when making significant financial updates. Life events and changing circumstances can also create the need for revisions. Let's take a look at some of the times you need to review your estate plan.
1. Change in Your Dependents’ Needs
Your estate plan was based on your dependents’ needs at the time you signed it. Of course, children and other dependents grow and mature over time, which can make your estate plan outdated. If any of the following situations applies to you, it may be time to update your plan:
- The birth or adoption of a child/grandchild
- A child/grandchild needs educational funding
- A child/grandchild becomes an adult (age of 18)
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The guardian named in your will has passed away or can no longer serve
- Changes in the number of dependents (e.g., beginning to care for an adult)
2. Changes with Your Spouse or Other Family Members
Changes in family relationships or health circumstances can significantly impact your estate plan. Some examples include the following:
- Marriage or divorce
- Illness or disability of your spouse
- You have a blended family and want to provide for stepchildren
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A key family member passes away or becomes disabled
3. Major Changes to Your Assets or Liabilities
A big part of estate planning is based on the types and size of assets you own. When your financial situation changes, either for the better or worse, your will and trust may need to be adjusted. Failing to plan for these types of changes could mean your estate plan is incomplete or is no longer accurate:
- You purchase property, a home, or other large asset
- You borrow a large amount of money or take on liability
- Large increases or decreases in the value of assets, such as investments
- You (or your spouse) receive a large inheritance or gift
4. Career and Goal Changes
Your estate plan should also accurately reflect your career goals and those of your spouse (if applicable.) Business owners may be particularly at risk of having outdated estate plans if they don’t make periodic updates. Consider revisiting your plan if any of these situations apply:
- Career changes, such as a new job or promotion
- You start or close a business
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Your financial goals or those of your spouse shift significantly
5. Changes to the Law
Estate planning laws are largely state-specific and do change over time, whether it’s updates to tax codes, regulations governing trusts, or state-specific probate rules. Even minor legislative shifts can significantly impact the effectiveness of your current plan. Staying informed and making necessary adjustments ensures your documents remain compliant and optimized for current legal standards. It’s essential to re-evaluate your documents if:
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You move to a different state
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Federal or state estate tax laws change
Other Potential Scenarios
Life is unpredictable, which is why regular reviews of your estate plan are critical. Additional reasons to evaluate your will, trust, and advance directives include:
- Changes to your life or long-term care insurance coverage
- Change in intentions (you want a new person to have power of attorney, guardianship, etc.)
- Death or change in beneficiaries (e.g. you want to add a charity, a beneficiary predeceases you)
- Death or change in the circumstances of your executor or trustee
Are Your Estate Planning Documents Current?
Preparing your estate planning documents was an important step, but don’t take a “set it and forget it” approach to your plan. Regularly reviewing and updating your documents ensures your wishes are honored, your legacy preserved, and your loved ones protected. If you’re unsure where to begin or need help reviewing your plan, Caldwell is here to guide you every step of the way. Contact us today to schedule a consultation and ensure your estate plan is up to date and working for you.
