Creating a comprehensive estate plan is one of the best gifts you can give to yourself and to your loved ones. Once your plan is in place, however, do not make the mistake of simply forgetting about it because an estate plan is something that needs to be reviewed and revised throughout the course of your lifetime for it to work as intended. In fact, having an outdated estate plan in place when you die, or become incapacitated, can be worse than not having a plan at all! To encourage you to keep your plan up to date, the Hauppauge estate planning lawyers at the Law Offices of Kobrick & Moccia explain when you need to review your estate plan.
Why Reviewing and Revising Your Estate Plan Is Important
Taking the time to make sure your estate plan is up to date is extremely important. A well thought out and comprehensive estate plan does much more than just create a roadmap for the distribution of your estate assets at the end of your life. Even that, however, could go horribly wrong with an out of date plan. Imagine, for example, that you had not updated your Last Will and Testament for many years at the time of your death. Since you executed your Will, you got divorced and one of your children developed a bad substance abuse addiction. Unfortunately, because you failed to update your Will, your ex-spouse is named as Executor of your estate and your (rather large) estate is being split evenly between your two children. Your child with the addiction is getting a very large lump sum of money that will undoubtedly be squandered in record time. Had you updated your estate plan, you would have created a trust to safeguard your child’s inheritance and named your other child as your Executor. Or how would you feel if you were suddenly incapacitated and your ex-spouse was named as your Agent for making healthcare decisions and given control of your assets during your incapacity? There is an endless number of scenarios that could illustrate the need to review your existing estate plan. Knowing how often a review and revision should occur is essential to protecting yourself, your loved ones, and your estate assets.
When Should You Review and Revise Your Estate Plan?
There are no universally accepted time tables for reviewing and updating your estate plan as a matter of routine; however, most estate planning attorneys suggest doing so every three to five years during your 20s, 30s, and 40s. During these decades, both your family and your estate are likely to encounter the most growth. Marriage, parenthood, and career advancement are all likely to occur during these decades and all could impact your estate plan. During your 50s, you should review your plan at least once to ensure that you make any necessary changes or adjustments as you near retirement age. Once you enter your retirement years, a routine review of your estate plan should occur every five to eight years just to make sure everything remains current.
Life Events that Should Trigger a Review of Your Estate Plan
Along with routine reviews of your estate plan, there are a number of life events that call for an immediate review and revision of your plan, including things such as:
- Marriage and divorce – your own marriage or divorce will necessitate changing beneficiary designations within your plan most likely. The marriage of a child is also something that could trigger a review because your son/daughter-in-law could now stand to gain control over the inheritance you plan to leave your child.
- Birth and death of beneficiaries or fiduciaries — basically, the death of anyone who is part of your estate plan, as a beneficiary or fiduciary, is cause to review your plan. The birth of a child or grandchild should also be specifically noted in your plan to ensure your beneficiaries are properly identified.
- Move out of state — because state laws govern many aspects of your estate plan, moving to a new state should call for a consultation with an estate planning attorney in the new state to determine if any changes to your plan are advisable.
- Major change in assets – your estate plan should include provisions that can handle shifting assets; however, a major increase or decrease in the value of your assets, or the acquisition or sale of a major asset (such as your home or business), should give rise to a review of your plan to see how the change impacts your overall plan.
Contact Hauppauge Estate Planning Lawyers
For more information, please download our FREE estate planning worksheet. If you have questions or concerns about when your estate plan should be reviewed, contact the experienced Hauppauge estate planning lawyers at the Law Offices of Kobrick & Moccia by calling 800-295-1917 to schedule your appointment.