Setting up an effective estate plan is an important step for anyone to take. Knowing how and when to update an estate plan is an equally important part of an estate plan that estate planners should also be prepared for.
When is a good idea to update and review my estate plan?
The estate planner can review their estate plan annually, semi-annually or on a quarterly basis. It is a good idea to review an estate plan according to the general recommendation that is every three to five years or if there is a specific life event that should occasion the update of the estate plan.
There are also several situations and circumstances when it is a good idea to take a second look at an estate plan including:
- The birth or adoption of a new child or grandchild, when a child or grandchild graduates into adulthood or when a child or grandchild needs funding for their education;
- The death or change in circumstances of the guardian named in the estate plan to care for the estate planner’s minor children;
- The death or change in circumstances of the executor or trustee named by the estate planner;
- A change in the number of dependents the estate planner is caring for;
- If a family member becomes ill, disabled or passes away;
- A marriage or a divorce;
- A change in the estate planner’s financial goals;
- An illness or disability of the estate planner’s spouse;
- A change in the estate planner’s life insurance or long-term care insurance coverage;
- The purchase of a home or other large asset;
- Borrowing a significant amount of money or taking on any other liability;
- A large increase or decrease in the value of the estate planner’s assets such as their investments;
- A career change or promotion or if the estate planner starts or closes a business;
- The receipt of a large inheritance or gift; or
- Changes in federal or state laws that apply to taxes or investments;
Estate planners should know when it is time to update an estate plan. It can help them ensure their loved ones are cared for and their estate plan is distributed in the way they want it to be when the time comes.