This question is one of the most popular that I get from clients and there are many factors that go into the answer. As a general rule, I recommend my clients to dust off their documents every three to five years and review their plan. However, there are many things that can prompt an earlier review than the fact that three years have passed. Some questions that should be asked if you should come in to update your documents include:
-Has anything changed financially to my estate?
-Have there been any children born or adopted into my family?
-Has there been a marriage or divorce?
-Has there been a death in the family?
-Have any trustees, personal representatives or other fiduciaries named in my documents passed away?
-Have I moved?
-What is my current relationship with those chosen as fiduciaries or beneficiaries under my estate plan?
-Has there been a change in the law?
-Have I retired?
As my clients’ family, financial or geographic location changes over time, so can their estate plan. Sometimes a person we choose as a fiduciary might be getting older and struggling with good health. It would be important to update the documents to put in a fiduciary that is better able to carry out those responsibilities.
Other times, when a person moves there may be differences in the law from state to state that could affect an estate plan. Furthermore, after a move, a personal residence or other property may need to be titled to a trust to avoid probate or additional administration in the new state.
There also may be conflicts or reconciliations between you and those named as beneficiaries under your estate plan. If you fail to update your documents, that beneficiary may receive more or less than your wish. In other cases it could be important that a beneficiary receive their inheritance at a different age or in a different way protect their inheritance from creditors or in some cases themselves.
If you are unsure whether or not updates in your documents are needed, it is my recommendation to have an estate planning attorney review your documents and discuss with them your current situation to determine your best options moving forward.
Written by Sun Lakes Estate Planning Attorney Scott Jensen