Most people know that they should change the oil in their car every 3,000 miles. Most people also know that if they have their car for a long time that they will need to have a mechanic review it on a regular basis to determine if the car needs new brakes, tires, filters, etc. What most people don’t know is that estate planning documents (wills, powers of attorney, etc.) need regular “checkups” and maintenance. So how often should your estate planning documents be reviewed?
To answer the question above, you need to first consider the goal of your estate planning documents. Your estate plan is a detailed summary of your desires, your assets and how you best want to use your desires and assets to protect your loved ones in the future and minimize any tax consequences your loved ones may face upon receipt of your assets. Of course, you estate planning goals change over time. The same will you had drafted when you were first married will most likely not accomplish you estate planning goals if you now have children or divorced your spouse.
So, how do you know when it is appropriate to review and potentially update your estate plan? Generally, any changes in your personal, financial, family or health situation, as well as changes in tax laws that may affect your estate plan are the best times to review and update your plan. In addition, as a general rule, it is a good idea to review your estate plan at least once a year. As you are reviewing your estate plan, keep in mind the changes that have occurred in your personal, family, financial, family or health situation, and make note of those changes (do not write on the actual documents!). Once you have a list of possible changes to your estate planning documents, contact an estate planning professional that can assist you in updating the documents; often, changes can be made by simply attaching an amendment to your current estate planning documents.