When to Review And Renew Your Estate Plan
Change is inevitable. With estate planning, you put in place the best plan you can at the time. However, as changes come in your life and in the law, your plan may need some changes too. So when should you review – and possibly renew – your estate plan? Here are some specific times you need to call for a review.
Changes in Your Life
Have you had any major changes in your life? Has your spouse died? Did you get a divorce? Have you gotten married? All of these require an update in your plan, even if you are keeping your Trustees or agents and your beneficiaries the same.
Other changes that may necessitate a change include an increase (or decrease) in your net worth; receiving or anticipating an inheritance; moving out of state; buying a second home or rental properties; and acquiring assets that you didn’t own when you created your estate plan.
Changes in the Lives of Your Trustees and Agents
When you put your estate plan in place, you made the best choice for who would take charge of your estate at that time. As time passes, however, that choice may no longer be the best. Has your agent or Trustee aged to a point where they may not be able to handle your estate when called upon? Have they passed on? Are they too ill to serve? Have they moved overseas? Looking at who you named as your Trustees, personal representatives and agents is your first step in thinking about whether your plan needs an update.
Changes in the Lives of Your Beneficiaries
Who are your beneficiaries, and what is their current situation? If you put your plan in place when your children were minors and they now have children of their own, you need an update! Things can change in a beneficiary’s life, and that needs to be taken into account when we plan. A beneficiary who is going through a rough patch in their marriage or has creditor issues may need protections for their inheritance that weren’t necessary when you first created your plan. If one of your beneficiaries has special needs that weren’t present when you made your plan, you
may need to set up a special needs trust. If you’re not sure whether the changes in your beneficiary’s life require a change in your estate plan, come in for a consult
and let’s figure that out together.
Changes in the Law
One change that can make a difference in your plan isn’t even something you brought about. Federal or state law may change, necessitating a change to your plan. Currently, the big change is the passage of the SECURE Act. For more on that, see my article The SECURE Act and Planning for Your Retirement Accounts.
Other changes occurred in the last several years, and if you didn’t have your estate plan reviewed, you should make an appointment soon. In Arizona, the trust code changed in 2008. If your estate plan was put in place before 2008, a review is a very good idea, because the law on which it was based is now very different.
In addition, the federal estate tax exemption is now $11.4 Million per person. Your estate plan might have been put in place when the exemption was much lower, and you needed a complex plan to avoid the 40% estate tax. Now, you may not need that complex planning, and putting a far simpler plan in place will make it easier for your surviving spouse and children to administer. In particular, if your estate plan was created before 2012, you should have a review.
A Review Every Three to Five Years
I tell clients often that to decide on what plan is best for you, I need to know what you are planning for (what are your assets, what is your health status) and who you are planning for (what beneficiaries will receive your assets on your death, and what is their situation). If there are changes in the what or the who, then you need a review. A good rule of thumb is to review every three to five years. This review can be a simple phone call to check in and go over the basics of your estate plan and discuss what has transpired since you put it in place.
An easy way to make a review appointment is to call the office. If you are already my client, you can make an in-office appointment or schedule a 15-minute phone consultation. If you have not done a plan with me, call schedule a no-cost initial consultation. I always look forward to hearing from you!