Estate planning is not a one-time task. Life events, financial shifts, and legal changes can impact an estate plan. Regular updates help ensure that assets are protected and distributed according to current wishes and circumstances.
Major life events
Significant milestones often require estate plan updates. Marriage, divorce, the birth of a child, or the death of a beneficiary can all change inheritance plans. Updating a will, trust, or power of attorney ensures that important individuals receive proper consideration.
Changes in financial status
A substantial increase or decrease in wealth should prompt a review of an estate plan. Buying a home, inheriting assets, or starting a business can affect estate distribution. Adjustments can help reduce taxes, avoid probate complications, and align with financial goals.
Shifts in laws and regulations
Estate planning laws evolve, and changes can impact how assets are managed or taxed. Laws regarding inheritance, trusts, and estate taxes may shift over time. Consulting an estate planning attorney periodically can help keep documents compliant with current regulations.
Health concerns and aging
Medical conditions and aging may necessitate updates to healthcare directives and powers of attorney. A plan should reflect current medical preferences and ensure that a trusted person can make decisions if needed.
Revisiting every three to five years
Even without major life changes, reviewing an estate plan every three to five years is a good practice. Regular check-ins help identify outdated information and ensure that all assets, beneficiaries, and legal documents remain accurate and effective.
An outdated estate plan can lead to confusion, legal challenges, and unintended asset distribution. Regular updates help keep an estate plan aligned with life circumstances, financial status, and legal requirements.
