Despite understanding the importance of having a comprehensive estate plan in place, over half of all Americans have yet to create one. If you are among the minority and actually have an estate plan in place, you should be proud of the fact that you have taken such an important step. Creating your estate plan, however is only the first step required to ensure that you, your loved ones, and your assets are protected. The next step is to make sure you review your estate from time to time. Knowing when you should review your estate plan is just as important as creating your plan in the first place because an out of date estate plan can do as much harm as not having one.
How Often Should You Review Your Estate Plan?
Your estate plan reflects your needs, wishes, and goals at the time the plan is created. Life, however, brings with it changes that can impact your plan. With that in mind, it is a good idea to review and revise your estate plan as a matter of course every three to five years during your working years. Once you reach retirement age, you can generally extend that time period to five to eight years, assuming no major life events require a more immediate review.
Life Events that Warrant a Review of Your Estate Plan
ALong with reviewing and revising your estate plan every few years as a matter of course, you should also make a point of reviewing your estate plan when certain life events occur that warrant a review, including:
- Marriage or divorce — both marriage and divorce can have a significant impact on an estate plan. Your own marriage or divorce should always prompt you to review your plan; however, people often forget that the marriage or divorce of a beneficiary is also cause for an estate plan update because that marriage or divorce might impact the gifts you planned to make to the beneficiary.
- Birth or death — both births and deaths can be cause for a review of your estate plan. Though a well drafted estate plan will envision future born beneficiaries, it is always best to include them by name when they are born. The death of a beneficiary is also call for a review and revision. Although you may think to review your plan when there is birth or death among beneficiaries; however, the death of a Trustee, Executor, Guardian, or anyone else who holds an appointed position within your plan is also cause for a review of your plan.
- Change of residence to another state — most laws relating to wills, trusts, and estates are state specific, meaning that if you move to another state the laws of that state may impact your existing estate plan. Therefore, a review is warranted if you move to a new state.
- Change in the relevant laws — if there is a change in state or federal law that impacts your plan, you need to update the plan accordingly.
- Beneficiary reaches the age of majority– because a minor cannot inherit directly from your estate, the estate plan you create when your children and/or grandchildren are minors may look very different than when they are adults. Therefore, when beneficiaries reach the age of majority you should review your plan.
- Significant change in assets — a well drafted estate plan will account for changes in your assets up to a point; however, if you experience a significant change in your asset portfolio, such as winning the lottery or inheriting a substantial amount of money, you need to review and revise your estate plan.
- Reaching retirement age — many things change when you retire and almost all of them impact your finances, and, therefore, your estate plan. Consequently, you should review your estate plan around thee time you retire to ensure that it accounts for those changes.
If you are unsure whether or not a life event warrants a review of your estate plan, the best thing to do is to consult with your New Hampshire estate planning attorney right away.
Contact Us
If you have additional questions or concerns regarding the creation of an estate plan, or when a review of your existing estate plan is called for, contact the experienced New Hampshire Medicaid attorneys at Debruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.
- Revocable Trusts Are Not Always Treated the Same as an Individual - July 27, 2021
- Roth IRAs Can Be a Great Planning Strategy: Basics - July 22, 2021
- Trust Distribution Standards May Be Very Broad - July 20, 2021
