Estate planning attorneys generally advise their clients to review their estate plan every three to five years, and after any major life changes. This doesn't mean you should review only your will. If you used an estate planning attorney, your attorney may have prepared a will and several other documents that are part of your comprehensive estate plan.
A comprehensive estate plan may include a last will and testament, a revocable living trust, a durable power of attorney for your finances, a healthcare power of attorney, and a living will. Some estates include additional documents such as life insurance, retirement plans, and business plans.
All of these documents should be reviewed periodically to see whether your intentions have changed or if other factors necessitate revisions to your estate plan.
Common Reasons to Change Your Estate Planning Documents
Whether to revise an estate plan requires some serious thought on your part.
Some common reasons to change your estate planning documents include any of the following:
- Is there a new marriage? If so, you will want to ensure that your estate includes your new spouse and doesn't include your old one. You also need to help ensure that your children from a former marriage are properly provided for, either in your will or in a living trust.
- Is there a new domestic partnership or a common law marriage? Revisit your estate plan to provide for your partner. If not specifically provided for, your new partner may not inherit anything under the laws of your state if your partner is not mentioned in your estate planning document. This also applies to a common law marriage. To ensure that your common law partner is protected, make sure he or she is included in your estate plan.
- Have you changed the guardian you chose for your children? If so, you may want to revise your will. You also should consider adding a successor guardian in the event the guardian you chose is incapable of becoming the guardian of your children.
- Is there a new baby or an adopted child? Make sure your estate plan includes all children—including biological and adopted children.
- Do you want to disinherit a spouse or a child? If you've decided to disinherit either a spouse or a child, make sure that is part of your estate plan. Have an estate planning attorney assist you.
- Do you want to add or change beneficiaries, including a charity? Without updating your estate plan, a new beneficiary won't be added if you haven't included that person or charity. Likewise, if you want to remove a beneficiary, you will want to revisit your estate plan and check with an estate planning attorney.
- Have you divorced since your estate plan was made? It is crucial for you to revise your estate documents because your former spouse may make a claim as a beneficiary under an insurance policy or under a will or trust. Change your documents as soon as possible.
- Do you have a blended family? If you want to provide for stepchildren and you haven't already done so, you should revise your estate documents. Stepchildren are not usually included as beneficiaries if you die without a will or if your will fails to name them.
- Has one or more of your beneficiaries predeceased you? If a beneficiary has died, it is important to revise your documents either to provide for new beneficiaries or to redistribute your property among beneficiaries.
- Do any of your beneficiaries have special, or changed, needs that you want your estate plan to address? If any of your beneficiaries has special needs, or has developed a serious illness, you may want to provide for the care of that beneficiary. You should discuss this matter with an attorney.
- Have you moved to a new state? Each state's laws are different, so you may want to review your estate plan with an estate planning attorney in your new location.
- Do you want a new trustee for your trust? If you're considering substituting trustees or adding a successor trustee to your revocable living trust, it may be wise to review your entire estate plan.
- Have you received an inheritance or additional assets? The addition of new assets is a good reason for revisiting your estate plan. Some or all of the assets may be better off in a trust, rather than a will, to avoid probate. Discuss this with your estate planning attorney or financial planner.
- Do you want a new person to have power of attorney? If you have a durable power of attorney or a healthcare power of attorney, or both, it is a good idea to ensure they reflect your current intentions. If not, you can revoke either or both of them and then appoint a new person to have power of attorney.
- Do you have a living will? Are the directives in the living will what you want, or have you changed your mind? Discuss this with an estate planning attorney if you want to make changes.
- Did you open a business or do you currently own one? You may want to discuss a business succession plan with an estate planning attorney so the business can stay open. You also will be allowed to decide who you want to run your business.
- Are there new tax laws in place? Tax laws are always changing. Discuss this with your estate planning attorney and the effect of new tax laws on your estate plan.
- The mere passage of time is sufficient to warrant a review your estate plan. Even if nothing has changed, it's a good idea to review your estate plan if it's been at least three to five years since you last reviewed it.
Why It's Important to Update Your Estate Planning Documents
There are numerous reasons to amend a will or to amend a living trust along with your other estate documents.
You may have changed your mind about something such as beneficiaries, division of assets, or who you want to have your power of attorney since you last looked at your estate plan.
You may have inherited or purchased a significant number of assets since your estate plan was made, or you may have neglected to put some property into your revocable living trust. All of these are valid reasons for reviewing your estate plan.
Discussing your estate plan with an estate planning attorney is crucial when you have significant life changes. Without revisiting your estate plan, your property could end up with beneficiaries you no longer want or your children could end up with guardians you don't speak with anymore. You also may have grandchildren you want to add to your estate plan.
If you have had even one of the above changes happen in your life, it's time to revisit your estate plan so that your current intentions will be carried out. While people tend to put this off, it's important to have your estate plan reviewed right away. Hopefully, these documents won't be needed for a long time, but knowing they're in place can bring you great peace of mind.