HOW OFTEN SHOULD I UPDATE MY LAST WILL AND TESTAMENT AND ESTATE PLAN?
Have recent events in your life made you realize that your estate plan might not be meeting your wishes anymore? Are you wondering how much maintenance an estate plan requires? When should you update and how often should you update your estate plan?
(I am an attorney, but I am not your attorney. Nothing in this post should be construed as legal advice or to create an attorney-client relationship. This post is purely informational and educational. Consult with your own attorney about your specific circumstances and your particular estate planning needs.)
WHO NEEDS AN ESTATE PLAN?
Chalk it up to my bias as an estate planning attorney, but I believe that every person over the age of 18 needs a will and a well-rounded estate plan.
Having a will and a corresponding estate plan is not a function of how much stuff you own or your net worth. Instead, anyone who wants to protect their own dignity and simplify the administration of their estate for their loved ones should have a will.
Any well-rounded estate plan includes at least powers of attorney, a living will (or advanced directive), and a last will and testament. These 3 or 4 documents are the minimum documents you need.
A power of attorney allows someone to make your health and financial decisions in the event of your incapacity. Your living will allows you to specify your end of life decisions. And, your will governs the disposition of your assets after you die.
Further, your will also appoints a guardian for your minor children and is a fundamental necessity for anyone with minor children.
To read more about the 4 documents that every parent needs before having a baby, click here.
CAN I CHANGE MY ESTATE PLAN?
Unlike a contract, your estate plan can be freely modified, changed, amended, revoked, or supplemented at any time during your life. (To read more about whether you can change your estate plan and some of your limitations, click here.)
This means that if you change your mind throughout the course of your life about who you want to name as an attorney in fact or personal representative, that you still have the power to do so.
Just because you make an estate plan when you are young does not mean that you are bound to it for the rest of your life. Many of the young people I meet with are concerned about locking in their wishes.
I take the time to explain to them that they can change their estate plan at anytime. In fact, I have some clients who choose to change, amend, or totally revoke their estate plan regularly. Some change their estate plan every 6 months!
However, I will never tell you a specific time frame for updating your will. Changing or updating your estate plan does not correspond to a specific number of months or years. Instead, you should change your estate plan as your wishes and life change.
HOW OFTEN SHOULD I CHANGE MY ESTATE PLAN
Instead, my rule of thumb is that a person should always revisit their estate plan after a significant life event. Death in the family, birth of a child, marriage, divorce, or a major health event are some of those major life events.
Further, moving states, operating or selling a business, and changing jobs might be another reason to update your estate plan. These events might mean that you need different language in your will, a comprehensive business plan, or even an update to your life insurance policies.
These major life events mean that you should also take heed of whether your family, your children, or your wishes are reflected in your estate plan.
WHAT ABOUT MAJOR LIFE EVENTS IN MY FAMILY’S LIFE?
What about your child’s marriage, your child’s divorce, or the death of a parent? Do these third-party events impact your estate plan?
Perhaps.
Are you absolutely certain that you never want your inheritance to pass to a son-in-law? Do you expect to receive a major inheritance? Do you fear the loss of a business interest in divorce?
The only reason to update your estate plan in these third-party major life events are if those events undermine the goals of your estate plan. Some parents are adamant about including or excluding in-laws and grandchildren.
Other children know that a major inheritance will completely alter the profile of their assets, their taxable estate, and even their future.
Events that happen to other people in your life might not necessarily trigger an event that requires attention to your estate plan. However, always consider whether that event undermines or changes the goals of your estate plan.
HOW OFTEN SHOULD I UPDATE MY ESTATE PLAN?
Any changes in your estate plan are not a function of a specific amount of time. Every person over the age of 18 should have a well-rounded estate plan. (Read more about what an estate plan is here.)
And, that estate plan needs attention after every major life event. If you marry, have children, lose a loved one, or divorce, you should revisit your estate plan.
And, you should always consult with an attorney about whether your events or the events that happen around you are a reason to update your estate plan.