If you have an estate plan in place, you are well on your way to protecting yourself and your loved ones. Don’t stop now though. Reviewing and revising your estate plan is crucial to ensuring that your plan works as intended. A Los Angeles estate planning attorney at Collins Law Firm discusses five reasons to review your existing estate plan.
How Often Should I Routinely Review My Estate Plan?
Among the commonly offered explanations for the lack of an estate plan is the belief that one is too young, or lacks sufficient assets, to need an estate plan. The truth, however, is that every adult needs at least a basic estate plan to ensure that the state doesn’t dictate how the assets you do own are distributed after your death. If you have minor children, your Last Will and Testament is also the only official opportunity you have to appoint a Guardian for those children in the event one is ever needed. As you move through the various stages of your life, changes in your life will prompt the need for corresponding changes to your estate plan. Many of those changes can be addressed during a routine review of your estate plan. As a guideline, most estate planning attorneys suggest you conduct a routine review and revisions of your estate plan every three to five years during your 20s, 30s, and into your 40s. Reviewing your plan more frequently during those decades is necessary because you are likely to experience larger life changes during that time period, such as marriage, parenthood, and significant changes in your asset portfolio. From your 50s onward, a review of your estate plan every five to seven years is usually sufficient to incorporate any routine changes.
When Should I Conduct an Immediate Review of My Estate Plan?
While routine reviews are important, there are also times when a more immediate review and revision is necessary. The following five life events are among those that should prompt you to schedule a review of your estate plan:
- Marriage — if you get married, you will want to add your spouse as a beneficiary throughout your plan, including un your Will, your life insurance, and retirement plans as well as potentially designate your spouse as your Agent in an advance directive and/or plan for your spouse to take over for you in the event of your incapacity.
- Divorce — if you get divorced, don’t forget to remove your spouse as a beneficiary in your Will, life insurance policies, and retirement plans or your (now) ex-spouse will likely benefit from your death! You also need to remember to change an advance directive and other documents that transfer control to your ex-spouse.
- Beneficiaries reach the age of majority – when your children are minors, they cannot inherit from your estate. Therefore, your estate will likely include a trust to protect their inheritance. Once the last child reaches the age of majority, you may wish to change your estate plan to include direct gifts to your children instead of gifting through a trust.
- Death, incapacity or retirement of a fiduciary – throughout your estate plan there will be several opportunities to appoint people to fiduciary roles, such as Executor, Trustee, or Guardian. If a fiduciary dies, becomes incapacitated or retires, you will need to appoint someone to take his or her place in your plan.
- Relocation or retirement – your own retirement will likely cause significant changes to your financial portfolio which should, in turn, trigger the need to make changes to your estate plan. Likewise, relocation to another state or country also calls for a review because most of the laws relating to Wills, trusts, and estates are made at the state level. A consultation with an experienced estate planning attorney in your new state or country is needed to determine if any changes need to be made to your plan.
Contact a Los Angeles Estate Planning Attorney
For more information, please download our FREE estate planning worksheet. If you have additional questions about reviewing your estate plan, consult with a Los Angeles estate planning attorney. Contact the Collins Law Firm by calling (310) 677-9787 to register for one of our FREE estate planning workshops.