Even a well-designed estate plan is going to become outdated. It’s good to make the estate plan in advance, ensuring that it exists for the heirs when they need it. But doing this means that it is also possible to have an outdated estate plan if it gets neglected after that initial draft.
As such, people need to be aware that updates are usually necessary. There are two main ways to address this issue.
1. Updating after life events
First and foremost, many people will look for important life events that mean it’s time to make an update. Someone who is married may get divorced, while someone who already got divorced may get remarried. Other heirs – children or grandchildren – may be born, or heirs who were in the estate plan may pass away before the person who drafted that plan. Other examples of life events that may require an estate plan update include selling major assets, getting an inheritance, winning the lottery, retiring from a career, being diagnosed with a disease and much more.
2. Updating on a schedule
Another option is just to pick a schedule to make these updates. It’s best to do this fairly frequently. At maximum, the estate plan should get updated every 3 to 5 years. Making these scheduled updates is certainly better than not updating the estate plan at all. But it still does leave the door open for inaccuracies if major life events take place in between those updates.
At the end of the day, an accurate estate plan helps to transfer assets smoothly and it reduces the odds of a dispute. Anyone who is drafting such a plan needs to know about all of their legal options.