Why Reviewing Your Estate Plan is Essential: Keeping Your Wishes and Documents Up to Date
With our clients at Wakefield Law, we always explain that estate planning is not a one-and-done process. It’s a dynamic process that should evolve with your life circumstances, changes in the law, and your personal wishes. Wills, Powers of Attorney, Advance Medical Directives, Trusts, and other estate planning documents require regular reviews to ensure your documents reflect your current intentions and comply with the latest legal requirements.
The Importance of Reviewing Your Estate Plan
Life is unpredictable, and your estate plan should reflect your most up-to-date wishes as accurately as possible. Failing to update your estate plan could result in unintended consequences, including assets being distributed in a way that does not align with your current goals or people who you would not want to be handling decision making processes left in charge. Here are key reasons why reviewing your estate plan is essential:
1. Changes in Life Circumstances
Significant life events often necessitate updates to your estate plan. Some of these events include:
Marriage or Divorce: If you’ve married or divorced, your estate plan should be revised to reflect new beneficiaries and remove individuals should no longer be a part of your estate plan.
Birth or Adoption of a Child or Grandchild: Ensuring that new family members are properly provided for in your plan is crucial.
Death or Health Decline of a Beneficiary or Executor: If someone named in your plan passes away or becomes incapacitated, you must update your documents to appoint new individuals.
Changes in Financial Situation: Increases or decreases in assets may require restructuring your estate plan to accommodate new circumstances.
2. Changes in Estate Laws
Tax laws and estate planning regulations evolve over time. A change in state or federal tax law could impact the efficiency and effectiveness of your current estate plan. For example, modifications in estate tax exemptions, gift tax laws, or trust regulations might require adjustments to minimize tax liabilities and protect your assets.
3. Keeping Beneficiary Designations Current
Estate plans often include beneficiary designations on life insurance policies, retirement accounts, and payable-on-death accounts. These designations override the terms of a will, making it essential to ensure they align with your current wishes. Regular reviews can help prevent unintended distributions, such as an ex-spouse receiving assets you intended for someone else.
4. Updating Powers of Attorney and Healthcare Directives
Your power of attorney and healthcare directive grant authority to individuals to make financial and medical decisions on your behalf if you become incapacitated. Over time, relationships and trust levels may change, necessitating an update to these designations to ensure they reflect your current preferences.
5. Ensuring Business Succession Plans Are in Place
For business owners, estate planning involves succession planning. If you own a business, it is critical to review and update your estate plan to ensure a smooth transition in the event of incapacity or death. This can help prevent legal disputes and ensure continuity for employees and beneficiaries.
How Often Should You Review Your Estate Plan?
We recommend reviewing your estate plan at least every three to five years or whenever a major life event occurs. Additionally, keeping in touch with your estate planning attorney will help ensure that you stay informed about changes in the law that may impact your plan.
At Wakefield Law, we understand that estate planning can be a difficult process to face and keep updated. We are always ready to meet with our clients for a free consultation to see if updates are recommended or necessary. If it’s been a while since you reviewed your estate plan, now is the time to do so. Contact us today to schedule a consultation and ensure that your legacy is protected and your loved ones are cared for according to your intentions. 703.771.9740