Most people do not have an estate plan, so you are already ahead of the game if you have created one. If you haven’t, along with roughly 2/3 of Americans, it may be time to consider getting one in place.
But it’s not just drafting the estate plan that is important. That plan also has to be periodically updated so that it is still relevant when you pass away. How often should such updates be made?
Using a yearly schedule
One option is to pick a set timeframe and resolve to always make updates at that point. For instance, you may decide to do a bi-annual update where you review your plan every two years. This is certainly better than drafting a plan and then forgetting about it for decades, but there is still the chance that it could be out of date for a significant period of time before your regular review occurs.
Using life events
For this reason, it may be wise to instead use key life events as your polestar for when you should update your plan. When they happen, no matter how long it’s been since the last update, you’ll know that it’s time for another one. Examples of these life events include:
- Being diagnosed with an illness
- Purchasing or selling major assets, like homes or businesses
- Getting married for the first time, getting divorced or getting married for a subsequent time
- The birth of grandchildren or other heirs that are more distant relations
- Taking on or paying off major amounts of debt, such as a home loan or a business loan
- Deciding to disinherit someone who was previously listed in your will
- The death of an heir who was originally going to receive assets
- Any major changes to estate planning laws, such as laws that could have tax implications
These are just a few examples, but any life event that is going to have an impact on your future or your assets could trigger a review of your plan. Whether you are drafting that plan for the first time or considering an update, always be sure you don’t hesitate to seek legal guidance if you have questions or need assistance, given how high the stakes of your situation are or could become.