If you have already created an estate plan, you are ahead of most Americans; however, you are not done yet. Reviewing and revising your existing estate plan is just as important as creating the initial plan because having an outdated estate plan in place can be worse than not having a plan at all. The Essex Junction estate planning attorneys at Unsworth LaPlante, PLLC help you decide it if is time to review your existing estate plan.
The Importance of Reviewing Your Estate Plan
All too often, people go to the trouble of creating a comprehensive estate plan, then completely forget about the plan. In fact, failing to update an existing plan is one of the most common, and potentially most detrimental, estate planning mistakes. As both your family and your estate grow, you need to account for that growth in your estate plan. Along with routine reviews, there are several common life events that should trigger an immediate update of your estate plan.
How Often Should I Review My Estate Plan?
You should conduct planned reviews of your estate plan just to make sure everything is in place and that no changes are necessary. Exactly how frequently you need to conduct a routine review is not set in stone; however, most estate planning attorney suggest routine reviews every three to five years until your children have all reached the age of majority or until shortly before you plan to retire. After that, a scheduled review every five to eight years during your retirement years should keep your plan up to date.
When Do I Need to Immediately Update to My Estate Plan?
Certain life events should prompt an immediate update to your estate plan. Among those events are:
- Birth and Death. The death of anyone who is part of your estate plan, as a beneficiary or fiduciary, should prompt an immediate review of your plan. The birth of a child, grandchild, or other intended beneficiary should also trigger an update to make sure they are included.
- Marriage and Divorce. When you marry, you will likely want to include your new spouse in your estate plan by changing the beneficiary designations on things such as your Will, retirement plans, and life insurance policies. You may also want to review fiduciary positions. The marriage of a child is also something that could trigger a review because your son/daughter-in-law could now stand to gain control over the inheritance earmarked for your child. Failing to update following a divorce is one of the most common mistakes people make which could result in an ex-spouse inheriting all your estate assets.
- Children Reach Adulthood. When your children were minors, you had to protect your children’s inheritance because they could not inherit directly from your estate; however, once all your children are legal adults, you have the option to gift directly to them.
- Retirement. Retirement often means withdrawing funds from retirement accounts and selling major assets – both of which should prompt a review of your plan. In addition, if you have not yet considered the addition of a Medicaid planning component to your estate plan, you will want to do so to ensure that you qualify if you need help covering the high cost of long-term care at some point.
- Asset Structure Changes. Minor changes should be accounted for in your plan; however, if you r asset structure changes significantly you should review your estate plan to see if you need to make changes.
Contact Essex Junction Estate Planning Attorneys
For more information, please attend one of our upcoming FREE webinars. If you have questions or concerns about reviewing your existing estate plan, contact the experienced Essex Junction estate planning attorneys at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.