Once you finally get your estate plan together, it feels like a tremendous weight lifted because you know all of your wishes and instructions are in one place and will be legally executed as needed. However, estate plans, including wills and trusts, should be viewed as living documents.
These critical documents represent an individual’s or couple’s needs and wishes at a given moment in time, but they can change as time passes or with any notable life changes that may inevitably unfold.
Review Your Estate Plan When…
Here are some of the times in life when wills, trusts, and other estate planning documents should be reviewed and amended as needed.
The Year’s End or The New Year
Some of our clients make estate planning traditions at the end or beginning of the year. Calendaring the event and making it a tradition is the best way to review the current plans and ensure everything is still relevant.
Some years are more eventful than others, but even in a “normal” year, you’ll probably find there is some clean-up to do around:
- Additions, deletions, or changes in digital accounts or passwords.
- Financial account information (especially if you’re nearing retirement or just retired).
- There were additions to the family via children or grandchildren.
- Things have changed due to a death or divorce in the family.
- You realize there is a trustee/executor better suited to the job, or your current executor/trustee would prefer to be relieved of that role.
- You’ve added or sold properties or assets.
- Etc.
In many cases, a few minor changes can be handled with a phone call or email exchange with your estate planning lawyer. Others may require an office visit. Either way, an updated estate plan is the best way to protect your estate from probate court or being contested (the older the will or trust, the more loopholes there may be if someone contests it).
A recent medical diagnosis or physical incapacity
A new or challenging healthcare diagnosis is another good time to revisit your estate plans. In this case, we’d recommend starting with your Advanced Directives and End-of-Life planning documents. From there, you can continue your review.
You’ve been diagnosed with Alzheimer’s or dementia
A comprehensive estate plan includes some version of a long-term care plan. However, those may have been made years or even decades before long-term care was a need or consideration. Any diagnosis that includes Alzheimer’s, dementia, or cognitive decline should trigger a meeting with your estate planning attorney. The best care plans are put in place when clients are in their full mental capacity, so they have agency in making choices for their future care.
The birth (or adoption) of a new child or grandchildren
Your estate planning attorney will have more to add on this front when they get to know you and have a sense of your goals for heirs and beneficiaries. Some clients set aside specific percentages of the estate’s assets and then divide these evenly among children, grandchildren, nieces/nephews, etc. This prevents the need to change things whenever there is a new addition to the family.
However, others want to divide their estate more specifically or may need to protect certain assets from a spendthrift in the family. These plans require more careful attention and routine reviews help you to keep your finger on the pulse of whether your current bequeaths match the family dynamics and the good of the whole.
Marriages and divorces
Additions and subtractions to the family can also occur due to a marriage or a divorce. Both come with their own estate planning concerns.
Some of the preliminary things to review if you are marrying, divorcing, or remarrying include:
- Prenutpials and how they affect short- and long-term estate planning.
- Adding/subtracting pay-on-death (POD) beneficiaries from financial or life insurance policies (institutions and agencies like these are strict; even if you divorced someone decades ago, they would still be the POD or beneficiary of any policy that wasn’t changed after the fact—even if you are remarried).
- Thinking about estate planning for blended families, especially if your marriage includes the addition of step/bonus children who are minors.
- How will previous and future assets be divided if you are interested in distributions outside of California’s 50/50 community property laws?
- Disinheriting a former spouse if inheritances or bequeaths would stand up in court despite the divorce.
We always recommend that you review your estate plan with an attorney if a divorce or remarriage is imminent to protect everyone’s best interests.
Changes in estate laws or tax distributions
Beyond estate planning basics (wills, trusts, or advanced directives), comprehensive estate plans capitalize on estate laws and tax distributions. We always notify our clients of any significant changes along these lines and encourage them to get in touch to make changes if necessary.
However, if you’re not performing regular reviews of an old estate plan (five years old or more) or you haven’t remained in contact with the original estate planning attorney, you may have an estate that’s vulnerable to unnecessary taxes and fees due to legal/tax policy changes.
You’ve bought, sold, or changed your business
Do you own your own business? Even the smallest of businesses require some type of estate planning to protect proprietary materials, assets, etc., in the event you are incapacitated or die. If you have bought or started a new business, sold a business, or made significant changes to your business structure, business estate planning is key to making sure there is a fluid transition, transfer, or dissolution of the business down the road.
You plan to retire (or have just retired)
Estate planning attorneys and financial planners have much in common. Both focus on our client’s financial viability and sustainability. While you don’t need to be rich to need estate planning basics, we hope all clients can use their skills to plan for financial stability in retirement and beyond.
If you plan to retire in the next five years or so, revisit your estate plans to ensure they are still optimized for your retirement years. If you want more input about setting yourself up for a comfortable and viable financial future, we can refer you to reputable, fee-based financial planners in the area.
Tseng Law Firm Can Review & Optimize Your Estate Plan
Is your estate plan overdue for a review or refresh? Schedule a consultation with Tseng Law Firm.
We work closely with Bay Area individuals, couples, and families to craft comprehensive estate plans tailored to their needs. We’ll also help you review and revise your estate plans as necessary over the years so they always reflect your most recent goals and intentions.