Estate Planning begins with defining your goals, understanding the steps necessary to establish a plan fulfilling those goals, and then putting that planning in place. These are the elements of “getting it right”. But what about keeping it right?
Once my clients have an estate plan in place, they frequently ask me how often they should review their existing plan. Updating your estate plan is almost as important as creating the plan in the first place. There really isn’t a fixed prescription for how often you should review your planning. We advise clients to do this at least every four years, and more frequently when you get a bit older, but its really very different for different people. How often you need to review and revise your estate plan depends on your goals and also what happens in your life.
Peace of Mind and Estate Plan Review
At Clarity Legal Group, we tell our clients that we what them to know what their plan does, why they have the plan they have, and to understand how it works. This may seem obvious, but I promise you it’s not easy. This understanding — clarity if you will — tends to fade with the passage of time. Review of your plan will enhance and reinforce these understandings and we expect strengthen peace of mind.
I want to emphasize that this goal of peace of mind isn’t just a slogan. I think its one of the central reasons to plan. You have a one hundred percent chance of death, and if you’re like most people, you don’t want to leave a mess, and want things to be as easy as possible for the loved ones you leave behind. I believe that knowing that you have done that — that you have gotten it right — can free you from worry and liberate you to enjoy life that much more.
At Clarity Legal Group we have a Legacy Client Program, for clients who want to meet to review their planning at least every year. This not only enhances peace of mind, but in many cases, means a better planning result. More conversations between an experience estate planning attorney and his or her client means better conversations, which can produce better results. More frequent meetings can also catch needed changes to plan as life changes occur.
What Event Should Trigger a Review of Your Estate Plan
If you’re not seeing your estate planning attorney annually, when should you meet? As I said above, at least every four years, but sometimes, life events will prompt a need for corresponding changes to your estate plan.
Ten Events that Should Trigger a Prompt Review of Your Estate Plan
The following ten life events are among those that should prompt you to schedule a review of your estate plan:
- Marriage — if you get married, you will want to address planning your spouse as a beneficiary throughout your plan, including un your Will, Living Trust, your life insurance, and retirement plans as well as potentially designate your spouse as your Agent in an advance directive and/or plan for your spouse to take over for you in the event of your incapacity. You need to understand what statutory rights your new spouse does and does not have as a result of the marriage.
- Divorce — if you get divorced, don’t forget to remove your spouse as a beneficiary in your Will, life insurance policies, and retirement plans or your (now) ex-spouse will likely benefit from your death! You also need to remember to change an advance directive and other documents that transfer control to your ex-spouse.
- Retirement or Change of Jobs — if you more to a new employer, start a new business, or retire altogether, the picture changes. You should review your estate plan with your lawyer to ensure the beneficiary designations on new retirement accounts or work related life insurance, or other aspects of your financial portfolio are correct and also to discuss whether the change in your situation changes your goals in any way.
- Beneficiaries reach the age of majority – when your children are minors, they cannot inherit outright from your estate. While it is unlikely that this they will be ready to inherit a substantial estate outright at the age of 18 or even 21, this is an occasion to review decision making. Everyone is running his or her own race in life, and not all 21 year-olds or even 30 year-olds will be in the same place. This is an occasion for not only reviewing you decision in your plan for them, but also asking whether they should have basic planning in place naming you as a decision maker in the event they have a health or legal crisis.
- Marriage of your Children or other Beneficiaries — if your children who are to inherit from you get married, you will want to address planning. Your family has expanded and the perspective of you child has shifted. Does this influence how you want them to inherit?
- Death, incapacity, or retirement of a fiduciary – throughout your estate plan, there will be several opportunities to appoint people to fiduciary roles, such as Executor, Trustee, or Power of Attorney. If a fiduciary dies, becomes incapacitated, or relocates, you may need to appoint someone to take his or her place in your plan.
- Relocation – if you move from one state to another, this may justify changes to parts of your estate plan. The laws relating to Wills, powers of attorney, and health care directives are made at the state level. Asset protection laws are different from state to state. Spousal rights differ depending upon the state of residency. A consultation with an experienced estate planning attorney in your new state or country is appropriate to determine if any changes need to be made to your plan.
- A change in your health – if you receive a diagnosis suggesting a pending decline in you physical or mental health, or even a terminal diagnosis, put a review of your estate plan near the top of you todo list. This surprises a lot of my clients. I hear, “my planning is to prepare for death, so why would I need to review my plan if I have a terminal diagnosis”? The answer is that your plan is the appropriate plan for someone who might happen die or become incapacitated the next day, the next year, ten years later or when you are ninety-five years old. If we knew you were going to die next year, we might have a different plan.
- A change in your wealth – if you win the lottery, file for bankruptcy, or experience a less extreme change in your financial profile, it’s likely time to see how that impacts your estate planning goals. This can range from how it impacts your long term care planning, to the whether or not to include charitable beneficiaries at death, or whether to redefine how people will inherit from you.
- A change in your goals – as life goes on, you change. As you change, sometimes your priorities, goals, and perspectives change. When you see the world differently, you often see the considerations which drive your estate planning differently.
Contact Durham area Estate Planning Attorneys
If you have additional questions or concerns regarding when to review your estate plan, please contact the Raleigh, Chapel Hill, Durham estate planning attorneys at Clarity Legal Group by calling us at 919-484-0012 or contact us online.
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