Here’s When To Update Estate Plan Information With a Lawyer
Once you create a will, trust, or other type of estate plan, it doesn’t mean you won’t have to revise it at some point. Learn when to update estate plan documents, so you’re always prepared for the future.
Review Your Plan Every Six Months
Once your plan is complete, review it every six months or so. Look at who you have nominated as your successor trustee, personal representative, and attorney-in-fact (for your power of attorney). Consider whether or not the person you have named is still the best person for the job. If you have moved or are considering a move, you may need to update your documents due to differences in the laws of your new home state.
If you have a trust, review the titling of your assets to ensure that assets that should belong to your trust are actually owned by it. This is one of the biggest mistakes we see people make. They invest in a trust, but they don’t change ownership of their savings accounts, non-retirement investment accounts, or real estate holdings. Listing assets on a schedule is not enough. You must trust the owner. There is a common misconception that your trust lists the assets that it owns. In truth, it is just the opposite – the asset title reflects the owner’s trust. For example, a brokerage account statement should be addressed to your trust and identify the trustees by name. A semi-annual review can help protect your estate from an asset being accidentally retitled out of the trust. This can happen when you change banks, investment advisors, or move.
Reviews can and should be done with your attorney every few years, if not more frequently. If you are subscribing to an estate planning maintenance program, like the ones offered at Boyd & Boyd, P.C., annual meetings are often included..
Revise the Plan When Your Relationships Change
Oftentimes, a major life event may force you to consider your future and plan ahead. Marriage or divorce are common events that cause individuals to reach out to an estate lawyer for assistance.
Have you yet to create a will or a trust but want to leave all of your assets to your new spouse? Take action shortly after you marry so there’s no guesswork if the unthinkable happens.
Are you newly divorced and still have your ex listed as the executor and beneficiary of your will? You may wish to revise such documents, as they often include former spouses.
Update Your Information Following the Birth of a Child
Data shows that 92% of people with dependent children either have a will or know they’ll need one. If you’re not sure when to update estate plan information, think about your family. It’s possible you created or revised your plan after the birth of your first child, but what happens if you plan to grow your family?
Contact a lawyer when you welcome either biological or adoptive children into your family and want to account for them.
You Experience a Significant Change in Financial Status
The assets you own can change over time, sparking the need for a review of your estate documents. It’s also wise to update this information if your assets drastically increase or decrease in value.
For example, if you own a business and are considering a sale of that business, consulting your estate planning attorney in advance can save you hundreds of thousands of dollars. Structuring the sale impacts your rights to collect from the buyer and impacts the tax consequences, too. Consult an attorney long before a sale, for structuring the sale, and to make sure your documents are best suited to your needs.
Your Named Beneficiaries or Executor Passes Before You
When you create a robust estate plan, you’ll have to assign certain roles to your loved ones, including:
- Personal Representative (previously called the Executor): This person is responsible for settling your probate estate and carrying out your final wishes per your will.
- Successor trustee: Similar to an executor, this party settles your trust estate, meaning s/he handles the assets owned by your trust when you pass or become incapacitated.
- Beneficiary: You can name multiple beneficiaries to inherit your assets, such as a child, spouse, other relative, or charity.
- Power of Attorney: The person you name as your Attorney in Fact in your Power of Attorney can make legal decisions on your behalf for assets that are not in your trust if you’re suddenly incapacitated.
- Health Care Proxy: Your Health Care Agent is authorized to make medical decisions for you when you are unable to communicate your desires for medical care.
If you name someone to any of these roles and they pass away, you’ll have to revise your estate plan and name a replacement.
Is an Update Necessary Without a Major Life Event?
Knowing when to update estate plan information can prevent hassles for your loved ones. Do you need to revise your documents if you don’t experience any of the aforementioned events? Lawyers agree that it’s wise to review your information with an attorney at least every few years and make changes when necessary. Changes in statutes, regulations, and cases often impact your plan, and a meeting with your attorney can clarify if there are any legal changes that may dictate an update to your plan.
A relocation to another state is a key event that can impact the documentation. You will definitely want to consult with an estate planning attorney to check the laws in that state, as there could be different estate tax implications or other legal compliance issues that you’re not aware of.
Consult a Trusted Estate Planning Attorney
Now that you know when to update your estate plans, you can prepare for the future and have the peace of mind that comes from protecting your loved ones. Remember: Planning is never once and done … It is a process that you can adjust and adapt to your changing needs. Reach out to the Law Offices of Boyd & Boyd, P.C., if you need to create or revise a will, trust, or other vital document. We’re happy to assist with all of your estate planning needs.
Call (508) 444-9688 or contact us online for a free strategy session.
FREQUENTLY ASKED QUESTIONS (FAQ):
Q: When should I update my estate plan after a major life event?
A: Update your estate plan after significant life changes such as marriage, divorce, or the birth/adoption of a child to ensure your wishes are accurately reflected.
Q: Is it necessary to update my estate plan if my financial situation changes?
A: Yes, if your assets significantly increase or decrease, it’s important to revise your estate plan to account for these changes and ensure proper distribution.
Q: How often should I review my estate plan even without a major life event?
A: It’s advisable to review your estate plan every six months to ensure it still aligns with your wishes and to account for any changes in state laws or personal circumstances.
