If you have an estate plan, then you’re already in better shape than the two-thirds of American adults who don’t. But when is the last time you checked your plan to make sure everything is up to date?
An estate plan is not something you should just set and forget. Major life events, family circumstances, market conditions, and new legislation are common reasons to revisit your will and other estate planning documents.
Life is always changing. Not having an estate plan that reflects these changes could jeopardize your legacy and subject your loved ones to unnecessary complications.
How Often to Revisit an Estate Plan
Estate planning attorneys generally recommend reviewing an estate plan every 3 to 5 years. A lot can happen within that time. You want to make sure your plan reflects the way things are now—not how they were a few years ago.
An estate plan review ensures that the current state of affairs is reflected in the following documents:
- Last will and testament
- Financial account beneficiary designations
- Living will
- Medical and financial power of attorney
- Insurance policies
- Property deeds and titles
- Digital logins and passwords (i.e., your “digital estate plan”)
- Funeral instructions
- Executor guidelines
Missing some of these documents? You’re not alone. Caring.com’s 2023 Wills and Estate Planning Study found that 2 out of 3 Americans lack any type of estate planning document. Most believe having a will is important—yet only one-third have an estate plan. And 1 out of 4 who lack a will don’t ever plan on getting one.
Without a plan to distribute your assets to beneficiaries—known as dying “intestate”—succession takes place according to state law. Putting off estate planning could mean waiting until it’s too late. An estate plan not only considers what should happen when you pass away, but also your wishes if you are alive but incapacitated.
Reasons to Change an Estate Plan
Major life events, family situations, legislation, economic conditions, and unexpected circumstances like the pandemic can all be catalysts for reviewing your plan.
A life event is the primary reason why an estate plan is updated. Life events include things like:
- Marriage or divorce
- Birth or adoption of a child or grandchild
- A sudden windfall (e.g., inheriting or winning money)
- Buying or selling a home or other valuable asset
- Starting or selling a business
- Large investment gains or losses
- Moving to a different state or buying property in a different state
- Medical condition diagnosis
- Death, disability, or illness of a beneficiary
- A beneficiary becomes an adult
In addition to these major life events, there could be changes in your family situation that necessitate revisiting your estate plan, such as:
- The person you named as executor or power of attorney may no longer be the best choice
- A child or grandchild requires education funding
- You want to appoint a new guardian to care for your children
- You decide to place a young beneficiary’s inheritance in a trust because they have demonstrated bad judgment
- You wish to disinherit someone and reassign their share of your assets
Events outside of your family circle can also dictate estate plan changes. Many people cited the COVID-19 pandemic as an impetus for getting their estate in order. More recently, inflation has caused more Americans to prioritize estate planning.
Legislation can impact estate planning strategy as well. Here are some changes to tax law that could affect your plan in the coming years:
- The lifetime gift and estate tax exemption is set to be roughly cut in half in 2026, from $12.92 million per individual to around $7 million. A lower exemption could have implications for reducing the estate size using family gifting and trust formation.
- The Biden Administration recently released a fiscal year 2024 revenue proposal that could impact many aspects of estate planning, including the definition and role of an executor, business land that qualifies for special use valuation, the end of certain types of trusts, trust reporting on income taxes, hard to value assets like real estate and art, and other tax-related matters.
Although these tax laws might not come to pass, it may be advisable to plan for them now, before they are enacted.
Start Planning for the Future With Help From Graham Law
Where there’s a will, there’s a way to avoid burdensome state intervention in estate administration. A will is just the start, however. A comprehensive estate plan considers not only what happens to your assets after you pass, but also your health, living, business, and financial considerations for the rest of your lifetime. Every adult should have an estate plan, and it should be reviewed every few years or sooner, depending on your situation.
Start planning today: contact Graham Law and schedule an appointment to discuss your estate plan.