Estate plans vary from simple and straightforward, to more complex and time-intensive. This depends on a variety of factors including assets, debts, family situation, business planning, state and federal laws, health planning, special needs planning, and more.
The short answer to the question of how often you should update your estate plan is whenever there are changes in any of these factors. Life is full of complexities, and monitoring and updating your estate plan can seem overwhelming to the average person.
Consider that roughly 60% of people haven’t even taken the steps to create a valid and enforceable estate plan. If you’ve already done so, you’re a step ahead! Keeping your estate plan current is worth the attention on the front end, to save you and your family time, cost, and headaches down the road.
Let’s Break Down the Reasons to Update your Estate Plan
There are all kinds of life changes that can require an estate plan update. Many of them are easily overlooked. Let’s break them down, so you can make informed decisions when these changes happen.
Family Considerations
Health Considerations
As we age, many of us become more aware of the implications of health concerns to our financial security. The likelihood of incapacity due to injury or illness is higher than many people think.
Whether your health is changing, or you are just acutely aware of how quickly it can, having an updated incapacity plan means you and your family will be protected from fraud and exploitation, and your wishes will be honored even if you have a stroke, or are diagnosed with dementia or other health issues, and don’t have the ability or capacity for that conversation.
Financial and Business Considerations
Business owners should always contact an attorney with expertise in estate planning to create and execute a plan that will protect their business. We also recommend that they communicate with their lawyers as their business evolves. The original legacy plan you have in place may not make sense years down the road when business, and business relationships, change.
Company leadership can change, the size and scope of your business can change, and your wishes for both beneficiaries and successors can change due to all kinds of planned and unforeseen circumstances. You may even start a new business or end an existing one.
You’ll want to make sure your plan reflects those changes or it could put your business, finances, and the well-being of your loved ones at risk.
Taxes and other Legal Considerations
Estate law is fluid, ever-changing, and isn’t the same in all areas. If the tax laws change, you move to or from a different state, or you earn a new financial classification, it’s important to make sure your existing estate plan is still enforceable and that you are financially prepared for and protected from fees, penalties, and other costs.
If you are in need of an estate plan update, or you have questions about a new or existing plan, reach out to our team today.
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