How Often Should You Update Your Estate Plan?

Putting together a estate plan is a significant task, and once it’s done, it is tempting to lock the plan away (and I’m all for keeping those documents safe) and consider the task done. However, the task isn’t really complete. Life happens, and things change, and after a while, you might find that your plan doesn’t really work anymore.

How do you know when it’s time to give that estate plan another look? There are a few key events that should get you thinking about dusting off that estate plan and considering changes:

  • Changes to your family. Get married? Divorced? Have a child? Adopt a child? Did your beneficiaries have a new child? For the most part, Missouri law won’t automatically adjust your plan when your family changes. The only exception to this is in cases of divorce; Section 474.420 provides that if a person who has a will later gets divorced, for the purposes of handling the will, the ex-spouse will be treated as if he or she died at the time of divorce. Family changes are also a great reason to review your beneficiary designations on life insurance policies or retirement plans.
  • Changes to your assets. If the size of your estate changes dramatically, your estate plan may need to change with it. For instance, if you have an increase in assets, you may need to do some tax planning that might not have been an issue for a smaller estate. Also, you may gain assets that you want to make specific plans for. For example, if you start a business, you may want to pass your interest in the business in a specific way at your death.
  • Moving. If you move to another state, you’ve got a couple of issues to consider. First, does your estate plan meet the requirements of your new state? Each state has its own rules for estate planning documents, especially wills, and you’ll want to make sure your new state will accept them. Second, states may have different estate tax laws, and tax planning that makes sense in one state might not make sense in another.
  • Disability or serious illness. If either you or your beneficiaries develop disabilities or serious illnesses, additional planning may be necessary. For instance, if a beneficiary of your estate is disabled and receives certain benefits, receiving a bequest or an inheritance might threaten those benefits.
  • Your personal representative needs to be changed. Deciding on your personal representative can be a big decision; that’s the person you trust to administer your estate after your death. Sometimes that person, for a variety of reasons, might no longer be the best choice. Perhaps they’ve moved far away, or become disabled or deceased. Even if you’ve appointed successor personal representatives, it may be easier to adjust your estate plan accordingly.
  • Changes in estate tax laws. Estate tax laws have been very controversial for a while, and both the federal and state governments may change the rules from time to time. If there are major changes in the future, reviewing your estate tax planning may save your beneficiaries quite a bit of money.

Even if none of these events occur, it’s probably still a good idea to review your plan every 3 or 4 years, just to make sure. If an estate plan is worth doing, it’s also worth keeping updated.