It’s not uncommon for people to drag their feet when it comes to getting their estate plan in place. Similarly, when estate planning documents finally do get executed, many people put the documents in a safe place, check estate planning off their “to-do” list and forget about them. Unfortunately, like any plan, a proper estate plan requires periodic review and monitoring. So how often does one need to review their estate plan? I generally tell my clients that, at a minimum, they should review their estate plan with their attorney and possibly other professional advisors every three to five years to make sure the plan still makes sense for them and is still consistent with their wishes. However, I also advise them that, despite that general rule of thumb, many things can occur in one’s life that warrant a more expedient review of their estate plan. This is true regardless of whether one has a trust-based or will-based estate plan.
A non-exhaustive list of major life events that may warrant an immediate review one’s estate plan include the following: the birth or adoption of a child or grand-child; the death, incapacitation or simply a change in circumstances of any person designated in any role in the estate plan (i.e., trustee, personal representative or guardian); marriage or divorce; illness or disability of you or your spouse; the death of a spouse; the death or disability of a beneficiary; major changes in you or your spouse’s financial situation or financial goals; you or your spouse receiving a large inheritance or gift; major changes in federal or state laws regarding taxes; the purchase of or selling of major assets or business interests; relocation to a different state or country; change of intentions or wishes regarding the plan; just to name a few.
It is difficult to name all of the possible situations that warrant an immediate review of one’s estate plan. The best advice in my opinion is, if you are in doubt as to whether your estate plan ought to be reviewed prior to a regular planned interval, speak to your attorney about the event or change and how it might impact your existing plan. Outdated estate plans can, and often do, cause unintended consequences and outcomes and often result in the distribution of one’s estate contrary to their wishes and desires.