Now Is A Good Time To Review & Update Your Estate Documents

Two Wills documents with an Estate Tax form.

The Christmas decorations are down, and the family guests have went back home. Football playoffs are in full swing and college basketball is starting tournament play. Your life is settling back into its happy, standard routine. It may be a little dull, but that’s your prerogative and you like it that way. You have a little more free time on your hands than you did a month or so ago and definitely less distractions. There’s one task you’d been putting off for a while. Isn’t now the best time to do it?

That task is to update your estate documents.

It’s been several years since you took the time to work out a careful, well-constructed estate plan. You consulted with an elder law attorney, drew up a will or living trust, set up medical and financial Powers of Attorney in the event something would happen to you or your spouse. It was hard work, and it was necessary, but you’re not finished. Estate planning is not a one and done proposition. Every few years you should review your existing estate plan. Corrections may need to be made to reflect specific life changes.

You may be thinking why or if this is really necessary. Yes, it is. This concept isn’t designed to bring unnecessary stress. The holidays are a time for people to reflect on their current life, as well as their future plans. The factors that initially interested you in creating an estate plan in the first place, also should motivate you to consistently review it. You want your estate in order in the event of tragedy. You want to ensure that your family is taken care of.

There are some questions to ask yourself between commercial breaks, after holiday cleaning or during a quiet moment of reflection:

• Are the people you previously appointed to administrator of your estate still the best people equipped to handle those responsibilities?

• Are the people you previously appointed in your will to undertake the responsibility of serving as guardian(s) still able to take on the responsibility of caring for your minor children?

• Are you still comfortable with the way you initially set up the distribution of your assets? 

• Are the beneficiaries and/or charities named in your estate plan still the ones of your choice?

• Is your financial status and family situation still the same as it was at the time your estate plan was prepared?

Several years may have passed since you had your estate plan created. It makes sense to pull your plan out of the file cabinet, the safe or wherever you have it stored. Dust it off and review.

No one likes change, sometimes it’s pleasant or tragic. There’s a good chance that something about your family structure has changed since your initial plan. Perhaps you’ve gotten married, divorced or lost a spouse. Has your family unit grew smaller or larger? These are big, fundamental changes. They should result in fundamental changes to your plan.

Have you moved to a new state? Every state has unique probate laws. Many people are surprised to find that a will they drew up while living in State A, is executed differently in State B. Although the will may still be valid, if you have moved to a different state there are likely changes to be made.

When you decided on the terms of the estate plan, it was probably based on the financial situation you were dealing with at the time. Assumptions about future income and asset-acquisition were taken into account. Of course, the best laid plans can often go awry and you might well experience a significant change to your financial prospects. When this happens, it’s a good idea to review your estate plan and make changes that are appropriate to your new situation. These changes might include buying or selling a home, dramatic increase in the value of an investment or a new job.

Of course, these are just a couple specific circumstances in which it’s appropriate to review your estate plan. Don’t wait for a dramatic change to your lifestyle to review your estate plan. Reviewing should be a regular part of your financial planning.

Begin by doing a quick, relatively simple review every year. Remember, the federal tax code changes just about every year. State probate laws can change without much notice. Consult with your attorney during this time and determine if any minor changes are needed.

Also schedule a more thorough, in-depth review with your estate attorney every five years or so. This timeline will give you an opportunity to review your finances, discuss potential changes with family members and work to determine the best course of action.

Consistently reviewing and updating your estate plan can be the difference between a smooth administrative process and an unpleasant and possibly acrimonious experience. Don’t let this happen to you.