Estate planning is an important part of every person’s life. Once you have your estate in order, you must keep it updated to include all beneficiaries and property and to meet changing estate laws.
If you pass away with an outdated estate plan, some or all of your documents may no longer meet state laws and may be deemed invalid. Even if your plan is still valid, you could disinherit a loved one you have not yet included in your Will or Living Trust.
You should review your estate plan at least every five years, but two years may be a better estimate. Outside of this regular review, you should also update your plan if there is any significant change in your life.
Marriage, divorce, births and deaths may mean major beneficiary changes. If you don’t update your plan when these events occur, your family may endure a lengthy probate.
It is probably a good idea to modify your plan every time you buy or sell a piece of property. This is especially true if you move to a new state or simply buy land there. When you buy land in another state, you must consider new estate laws and how they will affect your estate plan. Make sure your plan meets the guidelines of the state where that land is located.
An often overlooked reason to update an estate plan is a change in the total value of assets. If your net worth increases above the exemption allowed for federal and/or state estate tax levels, your estate could owe taxes. Updating your plan could allow you to work with your attorney on some estate tax reduction methods or at least will make you aware of what the tax burden will be.
You can update your estate plan by modifying your Last Will and Testament or Revocable Living Trust. Don’t forget to destroy copies of old estate documents after you have executed the new ones.