If you have already created an estate plan, you should be congratulated. Widespread estimates indicate that only one-third to one-half of the adult American population has invested time and energy in this way. However, it’s also important to avoid falling into the trap of thinking that you can put an estate plan together and forget about it forever.
Almost all estate planning resources function as living documents. Meaning, that they can – and should – be updated as often as is prudent and/or necessary to reflect the evolution of your wishes, needs and priorities. As a result, it is generally a good idea to review your plan documentation annually – perhaps during tax season – to ensure that your wishes remain up to date. However, there are also other milestones that may warrant an adjustment as soon as they occur.
Milestone updates
Most of the time, estate planning documentation needs to be immediately updated when major life events and financial transactions make the need for an update particularly urgent. You probably won’t want to wait until your annual documentation review if any of the following things occur, simply because waiting could result in significant ramifications if something happens to you before a new year dawns:
- You get married
- You get divorced
- Your spouse dies
- A child or grandchild of yours is born or dies
- A significant beneficiary of yours is born, dies, gets married or gets divorced
- You make a major purchase
- You sell a major asset
Additionally, if you are diagnosed with a significant medical condition, your power of attorney and/or living will documentation may need to be updated.
In short, you’ll want to review your estate plan annually and work with a legal professional to make legally-enforceable updates when necessary. However, major life events may warrant an update sooner rather than later.