A comprehensive estate plan review is recommended at a minimum of every three to five years. Other circumstances may create the need for a more frequent review. This article will present the factors you should consider when deciding whether to schedule an appointment to review your current plan with an estate planning attorney.
I HAVE NO PLAN SO NOTHING TO REVIEW
Even if you have no written estate plan, your estate plan has been provided by the state of your residence. If you are a Wisconsin residence, your plan can be found in the statutes of the State of Wisconsin. The state provided plan may have several surprises in it, especially, if you are in a second marriage and have children from a prior relationship. Do yourself a favor. Find out how the state’s plan works or doesn’t work for you.
NOTHING HAS CHANGED IN MY LIFE SO WHY DO I NEED A REVIEW
Since your estate plan was prepared, your situation has remained stable. Lack of change in your circumstances is not conclusive as to whether or not a review is necessary. Two other factors come into play. First, changes in the law may significantly impact whether your plan will work as initially designed. Second, your estate planning attorney may have developed new planning strategies that would be beneficial to you and your family. Does your plan include provisions for digital assets and access to online accounts. Older plans will not include provisions to cover these items. In recent years, updates have helped families to save money administering trusts for married couples upon the first death of a spouse.
I AM RETIRING SOON
An estate plan review makes great sense at the time of retirement. Often with retirement comes a change in investments and life insurance benefits. If you plan on rolling over your workplace benefits to a private investment company, you need to make sure your beneficiary designations are properly coordinated with your estate plan. The level of your wealth at the time of retirement may require you to alter your lifetime giving strategy. If retirement will include a move to another state, your estate plan should be viewed in light of the state laws of your new home.
CHANGE IN YOUR HEALTH STATUS
Make sure your plan is up to date if your health begins to decline. Certain planning strategies can best be undertaken when you are still legally competent to sign documents for yourself. A trust and powers of attorney are critically important if you lack legal capacity to alter your plan on your own. Make sure that these documents still accurately depict your wishes.
CHANGES IN THE HEALTH OR OTHER CIRCUMSTANCES OF A FAMILY MEMBER
Has a family member acquired special needs not addressed in your current plan. Should you reduce the share your lottery winning son receives in order to increase the share another child or include a charity. Has a feud developed between your children. Has a poor relationship been repaired.
CHANGE IN THE HEALTH OR CIRCUMSTANCES OF AN AGENT OR TRUSTEE NAMED IN YOUR PLAN
When your current plan was designed, you selected individuals to play important roles. People you named to handle your finances, make decisions about your health, and even raise your children. Can the person named still best fulfill that function. Has the person you named:
- Moved out of the area
- Suffered a decline in health
- Acquired new responsibilities that may impair the ability to spend time assisting you
- Exhibited personal traits that cause you to lose faith in their decision making abilities
BIRTHS AND DEATHS
A good estate plan provides for the contingencies of births and deaths. For instance, a young couple’s new child will normally be treated the same as the children listed by name in the plan. When a trustee or beneficiary dies, a backup is named to fill the vacancy. Are your backups still appropriate or sufficient in number. Do the contingencies built into your plan still make sense.
MARRIAGES AND DIVORCES
Many plans are created when your children are young. Contemplating a child’s marriage and grandchildren is remote while you are struggling to have them complete their multiplication and division homework. Now that the children are in their 20’s and 30’s, how do feel about these matters:
- If your child died unexpectedly, are you confident your son-in-law or daughter-in-law would protect the best interests of your grandchildren.
- Is your son or daughter’s inheritance protected from a divorcing spouse
- If your child is engaged in a risky business or exposed to professional liability, does your plan provide for asset protection (i.e., child would not lose inheritance in a lawsuit or bankruptcy)
- Do you want to make a specific bequest to a grandchild (a fishing rod or favorite ring) that wasn’t even born when your plan was made.
NOTHING TO LOSE; MUCH TO GAIN
Don’t be a stranger to your estate planning attorney. A review meeting may save several headaches and dollars for you and your family. Many attorneys including myself provide complimentary estate planning reviews for both existing and new clients. Even if your attorney charges for these meeting, it is usually money well spent.