When you prepare your estate plan, you essentially strive to answer the question: How will my estate be disposed of when I pass away or get incapacitated? For both contingencies, you plan ahead as to who will get what part of your estate when these incidents take place. Assuming you have a well-executed estate plan, you will most likely get your wish in the event of your death or incapacity.
Please note however that many things can still happen between the time you finalize your estate plan. Before you die or become incapacitated, there may be changes in your personal circumstances. You may have new children – either by birth or by adoption. Or you may remarry because of divorce, or the death of your spouse. These milestones mean that you will have to update your beneficiary designation to reflect these changes. Just imagine what could happened if you pass away right after you remarry and your estate plan was not updated to reflect your new status. Your new spouse will not have been named as a beneficiary!
You do not have to review your estate plan every year. You just have to do it every time you go through personal milestone. As an estate planning attorney from Orange County, I suggest you consult your lawyer when you go through one of life’s milestones and amend your estate plan.
You yourself may not experience milestones but you may sense that some members of your family may need special attention which may prompt you to update your will or trust. You note for example that one of your children has an unstable career and is often “in between jobs.” You may want to adjust his / her share of the inheritance to help him / her financially when you die. Other circumstances in your family may prompt you to want to likewise update your estate plan.
Besides you and your family’s personal circumstances, there are two other major reasons to keep your estate plan current: the value of your estate and prevailing estate tax laws. The value of your estate may decrease over time. You may have acquired (or lost) specific items of property like new pieces of real estate. You then want to designate your newly-acquired assets to specific beneficiaries. Again, this means updating your estate plan.
As for estate taxes that are governed by state and federal laws, they may change from time to time. As an estate planning attorney from Orange County, I alert my clients of any significant changes in estate tax laws that impact their estate plan. They may not have to update their estate plan; but they may have to map out new strategies on how to save on estate taxes.
Always remember that your personal and family circumstances as well as the value of your estate will most likely change from the time you first execute your plan to the time of your death or incapacity. Be sure to review your estate plan whenever you experience changes in your personal life and with your estate. You must keep your documents current so that your final wishes may be fulfilled when the time comes for your death.