When to Update an Estate Plan
An estate plan that is never updated works about as well as a car that is never serviced. They're both in great condition when they're new, but the wear and tear of the intervening years can take an enormous toll. Since even the most well-conceived plan cannot predict every contingency, a careful review of an existing estate plan is critical to making sure that it will continue to meet evolving needs.
The best time to review? Some people review annually, and find it convenient review after they file their income tax return or on their birthday. Most people find annual reviews more often than they need, and review every three to five years. It doesn't matter which method is selected, as long as the plan is reviewed periodically. As our client, we will calendar and remind you for at least an every-three-year review.
Knowing what questions to ask
As a starting point for reviewing an estate plan, determine if any of the following changes have occurred since the plan was created:
Now determine if there have been any of these other personal or professional changes:
- Has there been a change in marital status - marriage,
divorce, separation, remarriage?
- Are there more children in the family? More
grandchildren? Has the number of dependents increased
or decreased? Have any children moved out of (or back
into) the home?
- Have any relatives or beneficiaries died?
- What about the relationships among family members and
beneficiaries? Has it changed significantly between any
- Have their been any changes to anyone's health - both
physical and mental - that would materially affect the
- Has there been a change in occupation?
- Has there been an address change, particularly a chance
to another state?
Finally, ask these questions regarding the overall financial plan:
- Have there been any changes in property ownership?
Has any property been purchased either jointly or
separately? Has any property been transferred to joint
ownership? To a dependent? To a trustee? Has a
residence in a difference state been purchased?
- Has there been any other substantial change in family
assets or liabilities? For example, have major assets
(such as a car or bank account) been acquired, any gifts
over $10,000 been received or made, a significant
money been borrowed or loaned, an inheritance received,
or a tax-deferred annuity opened? Have investments
- Was a business purchased? Has a business been
mortgaged, sold or liquidated? Has there been any
other material change in business circumstances?
- Have there been any changes in the amounts or sources
of retirement benefits (pensions, IRA's profit-sharing
plans and so forth)?
- Have any changes been made to a will, trust agreement,
buy-sell agreement, or any other document that will
have an impact on the estate plan?
- Has the person named as executor of the estate died?
Has any trustee died?
- Has any insurance changed? Besides life insurance, this
includes health insurance, group insurance, any other
employee plan, property insurance, and casualty
insurance. Have insurers changed? Have any policies
been surrendered? Have any policies lapsed?
- Have charitable intentions developed (or altered)?
Changes in any of the above areas might indicate that an estate plan has become outdated.
We suggest that an estate plan should be reviewed whenever there has been a substantial change in one of the above factors, or if no changes have taken place, every three to five years.