Your estate plan is a personalized set of instructions that tells your loved ones what to do when you pass away. It can also include information about your affairs if you become incapacitated.
Because of the nature of this plan, it shouldn’t ever be considered a one-and-done event. Instead, there are times when you should review and update your estate plan. Knowing when to do this can ensure that your plan is always up-to-date for your loved ones.
Major life events should trigger a review
Any major life events, such as getting married or divorced, should lead to you reviewing the plan. The same is true if you have children, adopt children or have grandchildren.
Estate plans lay out who should get which assets, so you should update the plan if you sell or purchase any assets. Retirement and gaining assets as part of an inheritance are also good times to review the plan. Changes in tax or estate planning laws are another trigger.
You will also need to review the plan if anyone named in it passes away. This includes beneficiaries, powers of attorney designees or the estate administrator. If any of those individuals dies or becomes incapacitated, you will need to decide who you want to replace them in the estate plan.
Even if you never have one of these major life events, you should review the plan every three to five years. This is a chance for you to ensure that it still reflects your wishes. Working with someone who can assist you with ensuring the updated estate plan is legally enforceable and provides clear instructions is beneficial.