When Should You Update Your Estate Plan?
An estate plan should not be something you create once, put on a shelf, and never think about again. Your family changes. Your finances change. Your relationships change. Your wishes can change, too.
That means your estate plan may need to change with you.
At Sage Estate & Business Law, we recommend reviewing your estate plan at least every 2–3 years, even if nothing major has changed. You should also review it sooner after significant life events such as marriage, divorce, the birth of a child, a move, a major change in your assets, or the death of someone named in your plan.
A review does not necessarily mean you need to rewrite everything. Sometimes the answer is that your existing plan still works. The important thing is knowing that it reflects the life you’re actually living.
How Often Should You Review Your Estate Plan?
A common recommendation is to review your estate plan every three to five years. We prefer at least every two to three years.
Why? Because five years can turn into ten years pretty easily. You get busy, nothing seems urgent, and the estate plan stays in the filing cabinet. By the time you finally look at it again, the people, property, and circumstances it was designed around may look very different.
A two- to three-year review gives you a regular opportunity to ask a simple question: Does this plan still make sense for my life?
You may not need to make any changes. But if something is outdated, it is much easier to address it when you catch it during a routine review instead of during a crisis.
When Should You Update Your Estate Plan?
The two- to three-year review is a good rule of thumb, but some changes should prompt you to review your estate plan right away.
You Get Married or Divorced
Marriage or divorce can affect who inherits your property, who makes financial or healthcare decisions for you, and who you have chosen as your executor or trustee. If your family circumstances have changed, review your plan to make sure it reflects the people and relationships in your life today.
I had a client who was going through a particularly difficult and contentious divorce. Suddenly, he had a major health crisis. The family raced to the hospital to get information and offer support, and the only person the staff would talk to about it was the soon-to-be ex-wife. That is the last person that he wanted to have make end-of-life decisions for him. These documents can become even more critical while a divorce is pending, not just when it is finished.
Remarriage can be especially important to address when either spouse has children from a previous relationship.
You Have a Child or Grandchild
The birth or adoption of a child is a good reason to review your estate plan, particularly if you have minor children. Consider whether your chosen guardian, the people managing your children’s inheritance, and your wishes for how they should receive that inheritance still make sense.
The same applies as your family grows to include grandchildren.
Someone Named in Your Plan Dies or Can No Longer Serve
If your executor, trustee, guardian, financial agent, or healthcare agent dies, becomes unable to serve, or is no longer someone you trust with that responsibility, your estate plan should be updated.
Don’t wait until your family needs that person to discover that your first choice is no longer available.
You Move to a Different State
Moving to another state is a good reason to have your estate plan reviewed. Estate planning laws vary by state, and your will, trust, powers of attorney, and healthcare documents may need to be updated to fit your new circumstances.
You Buy or Sell Significant Property
A new home, rental property, sale of real estate, or significant inheritance can change how your assets should be coordinated with your estate plan. Your will or trust, asset ownership, and beneficiary designations should work together.
Your Financial Situation Changes
A significant change in your assets, inheritance, life insurance, investments, retirement accounts, income, or debt can be a reason to revisit your plan. You don’t have to be wealthy for financial changes to affect how your estate plan should work.
You Start, Buy, Sell, or Change a Business
Starting or selling a business, bringing on a new partner, or preparing for retirement can affect both your assets and your succession plans. If your business interests have changed, your estate plan and business documents should be reviewed together.
Your Relationships or Wishes Change
You don’t need a major life event to change your estate plan. If you no longer want the same person serving as your executor, your relationship with a beneficiary has changed, or you simply have a different vision for your family’s future, you can update your plan to reflect those wishes.
Has Your Life Changed Since You Made Your Estate Plan?
Make sure your plan still reflects your family, assets, and wishes.
What Should You Review in Your Estate Plan?
When you sit down to review your estate plan, don’t just pull out your will and ask whether it still looks familiar. Look at the entire plan and the people and assets connected to it.
Here are some of the things worth reviewing:
- Your will and trust. Do your documents still reflect how you want your property distributed? If you have a trust, are the assets that should be owned by the trust actually coordinated with it?
- Your beneficiaries. Review the beneficiary designations on retirement accounts, life insurance policies, and other accounts that pass directly to named beneficiaries. These designations can affect who receives an asset regardless of what your will says.
- Your executor or trustee. Would you still trust the person you named to handle your estate or manage a trust? Is that person still willing and able to serve?
- Your financial power of attorney. If you became unable to manage your finances yourself, is the person you named still the person you would want making those decisions?
- Your healthcare documents. Review your healthcare agent and other advance healthcare documents. Is the person you’ve chosen still the person you want making decisions on your behalf?
- Guardians for minor children. If you have children who are still minors, does your choice of guardian still make sense for your family?
- Your assets and property. Have you bought or sold real estate, opened new accounts, received an inheritance, or started a business? Your estate plan should account for what you actually own today.
- Your wishes. Most importantly, ask: If something happened to me today, would this plan still accomplish what I want it to accomplish?
Do You Need to Update Your Estate Plan If Nothing Has Changed?
Not necessarily.
A review does not have to result in a new estate plan. If your family, assets, relationships, and wishes are substantially the same, you may decide that your existing plan still works.
That is still a worthwhile review. The purpose of reviewing your estate plan every two to three years is not to change documents just for the sake of changing them. It is to make sure that the plan you have on paper still matches the life you are actually living.
Your Estate Plan Should Keep Up With Your Life
Estate planning is not a one-time task. The plan you created five or ten years ago may have made perfect sense at the time, but your life may look very different today.
As a general rule, review your estate plan at least every 2–3 years and sooner whenever you experience a significant life change. Marriage, divorce, children, grandchildren, a move, changes in your assets, a new business, the death of someone named in your plan, or simply a change in your wishes can all be reasons to take another look.
If you cannot remember the last time you reviewed your estate plan, that may be reason enough to start.
Want to know whether your estate plan still fits your life? Book a free 30-minute consultation with Sage Estate & Business Law. No preparation required. We’ll help you understand whether your current plan still reflects your family, your assets, and your wishes.