If you have a Will and/or Trust, you’re ahead of 60% of Americans. But getting an estate plan in place is kind of like changing the oil in your car. You can’t just do it once and forget about it. Here are 8 reasons to review your estate plan:
You move to another state (or buy a major asset in another state). Estate planning isn’t national. It depends on state-specific laws. A document drafted in Minnesota (for instance) won’t be interpreted the same in Arizona. Also, if you buy a vacation home or business in another state, that could complicate things.
The objects of your affection change. When you last updated your documents, you named your kids as beneficiaries. Now you’re remarried and you want to include stepchildren. Such details need to be documented in order to happen.
Your assets or liabilities change. If you receive an inheritance, it could change how that wealth should be passed to the next generation. The same goes for having increased liabilities. You could inadvertently treat beneficiaries unequally based on how things are owned, who is in charge, and who gets what.
The beneficiary designations on your retirement plan or IRA are obsolete. Retirement plans go to whoever is named as the beneficiary. Merely updating a Will or Trust doesn’t change the designated beneficiaries on your retirement plans. Also, retirement plans and IRAs get paid out immediately. Is that appropriate for who will be receiving them?
Your Personal Representative or Trustee designations are no longer appropriate. Are you sure you can trust the person you named originally? Does that person have a good relationship with your other loved ones? Perhaps it’s time to modify this.
You have a blended family. Blended families always complicate the estate planning process. What protections do you have in place to ensure that your own children or intended heirs won’t be disinherited?
You have a business. Have you thought through the nitty gritty details of who will operate this business while someone is waiting to get appointed as Personal Representative or to get control as trustee? Is your business actually owned by your trust to ensure a smooth transition? Does your trust document authorize the trustee to take necessary actions to manage your business?
It’s been five years since you last updated your estate documents. Things change quickly in life. A rule of thumb is to review your estate plan about every five years with your attorney. You can expect to spend almost as much as you did originally on your estate plan if you want your attorney to carefully review your situation. This is a necessary step to ensure that your wishes get carried out.