If you have created an estate plan, you are ahead of almost 70% of people who recently said they do not have a Will. However, it is important to review your plan every few years, and when certain life events create a need for immediate review.
When Should I Review My Estate Plan?
There is no set time frame for reviewing your estate plan but every three to five years it is a good idea to contact your estate planning attorney to talk about changes that have happened since the last time you reviewed your estate plan. As family members move and get married, it is important to update contact information on the Power of Attorney forms to ensure that the most up-to-date information is listed in case of emergency. There are also changes in the law that may impact your estate plan that could require amendment.
Then there are life events that happen which require more of an immediate update to your estate plan. Many of those events include the following:
Marriage - When you marry, you may want to include your new spouse in your estate plan. You may open joint checking accounts or purchase a home together. A complete review of your Will, Trust, Powers of Attorney, retirement plans, and life insurance policies should take place. If a child of yours gets married, that may also cause a review depending on how your child may take an inheritance.
Divorce - After a divorce, accounts that were once held jointly are divided and assets may be transferred from one spouse to the other. One of the most common mistakes is not removing the ex-spouse from your estate planning documents, retirement plans, and life insurance documents.
Birth of Children - This could require a guardian provision in a Will or updates to your Power of Attorney forms. With the birth of grandchildren, you may want to include them in distributions or review trust distributions.
Children reach age of majority - Depending on your state of residence and your estate planning documents, the age of majority could create instant access to an inheritance. Updating the age of distribution to beneficiaries may be warranted. Also, you should be aware that once a child becomes an adult, you as the parent are no longer able to access your child's financial or health records without express permission, or by having a Power of Attorney.
A significant change in assets - Your career may advance or you may inherit assets, as assets increase, the need for more sophisticated estate planning could be necessary. Further, depending on your profession, you may wish to look into asset protection.
Retirement - Entering into retirement, your estate plan may be drafted to include retirement plan assets, to and provide for a successor trustee, or an agent, to assist you with your financial transactions in the event you can no longer do so yourself. Reviewing your plan should be discussed as well as naming appropriate beneficiaries.
Serious Illness - Your plan should be designed to handle your incapacity or terminal illness. If a change to your health occurs, a review of your plan should take place.
Disability - Whether your own disability or that of a beneficiary, you may wish to update your plan to include special needs provisions or discuss Medicaid planning.
Death of spouse or beneficiary - The death of anyone named in your estate planning documents is a definite cause for review. You do not want to leave potential fiduciary positions unfilled and the death of a beneficiary should trigger a review of distributions.
Whether it is one of these events that cause you to review your plan or you simply want to make sure you know where your documents are, it is important to have a current estate plan as an outdated plan could have unintended consequences.
If you have any questions about preparing an estate plan, please feel free to contact Glick and Trostin, LLC at 312-346-8258.
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