If you own a computer, you know it requires regular software updates to fine-tune applications to make them the best they can be and keep them running successfully. Software updates address security issues, fix bugs, and add support. If you update your software, most likely, your computer will continue to work well. If you don’t allow for updates, you are taking the chance that your computer will let you down.
Did you know that your estate plan also needs to be “updated” regularly?
Your estate plan is a snapshot of your life the way it was at the time it was created. However, over time your family structure, your assets, and the tax laws change, so you should set a schedule to have your plan reviewed to make sure it doesn’t let you down. Just like software updates, updating your estate plan addresses changes in your life and changes in the law to keep systems running optimally.
So, when should you have your plan updated? Any change in your personal, family, financial, or health situation should prompt you to review your estate plan. But, in general, I recommend that you pick a date that you will remember to review the plan each year. Your cue to remember this might be a birthday or anniversary … any date that will jog your memory and allow you time to sit and read through your plan.
If you think a change is needed, don’t write on your estate plan. Call your wills and trust lawyer. Hopefully, your attorney operates like we do and does not charge for quick questions like these. You should be able to pick up the phone and speak to your attorney to ask whether your plan needs an update.
Better yet, you should ask your lawyer whether he or she has a formal update program that includes regular, formal check-ups. Some things might impact your plan that you don’t know about, such as changes in federal or state laws or life changes that you may not recognize as affecting your estate plan.
As a guide, I’ve provided a list of a few events that should prompt you to review your plan:
You and Your Spouse
- You marry, divorce, or separate
- Your or your spouse’s health declines
- Your spouse dies
- The value of your assets change dramatically
- Other changes to your assets, such as opening new retirement accounts, life insurance policies, or changing banks
- Change in business interests
- You buy new real estate, such as rental property, a vacation home, or real estate in another state
Your Family (and heirs)
- Birth or adoption
- Marriage or divorce
- Finances change
- Parent/relative becomes your dependent
- Minor becomes an adult
- Attitude toward you changes
- Health declines
- Family member dies
Other
- Federal or state tax laws change
- You plan to move to a different state
- Your successor trustee, guardian, or administrator moves, becomes ill or changes their mind
- You change your mind
If you need some help looking at your plan, I welcome you to contact our office at 919-443-3035 to discuss an Estate Plan Checkup.
