An estate plan is important to set up but after the estate planner sets one up, they should also regularly review it to ensure it is up-to-date. There are also important life events that should trigger the review of an estate plan that estate planners should be familiar with.
When to update an estate plan
There are several circumstances when it is a good idea to update an estate plan including:
- The estate plan moved to another state: laws related to estate planning and what is needed for a will to be valid, for instance, can be different in different states which is why estate planners should review their estate plan to ensure compliance after they have moved to another state.
- The estate planner’s relationships changed: the estate planner’s relationships are an important part of their estate plan which is why any changes to those relationships should be updated and reflected in the estate plan.
- The assets or liabilities of the estate planner changed: if there has been a significant change in the value of the estate, either an increase or decrease, the estate plan should be updated to include that change.
- Beneficiary designations need to be updated: beneficiary designations included in retirement plans are controlling which is why they should always be kept up-to-date and name the current beneficiary the estate planner wants the funds to go to.
- The executor or trustee designations become outdated: executor and trustee designations are important so if circumstances change, the estate plan should be updated to include new designations as needed.
Estate planning is a personalized process and as life circumstances change, the estate plan should be revisited to account for those changes. Estate planners should be familiar with when it is important for them to take a second, and then a third, look at their estate plan over time.