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Births. Deaths. Marriages. Divorces. Life.

There are dozens of events that can affect the details of an estate plan. And because no one knows when their last day or hour will be, it’s vital to regularly review your plan to ensure it’s up to date.

While some financial professionals may not deem it necessary to revisit an estate plan more than once every three to five years, I recommend making it an annual event–even if it’s just going through a quick checklist. Depending on the size and complexity of your estate, you may need to review it even more often–especially if there have been major changes in your financial situation, health, or other planning goals.

Many people may not realize how frequent estate plan reviews can actually produce significant financial benefits, while a failure to do so can result in penalties and problems after death. Following are some of the top reasons why should make sure your estate plan is current:

  • State taxes and income taxes can be minimized (a financial professional can suggest various techniques depending on your situation).
  • Assets can be protected from creditors
  • Heirs enjoy the worry-free benefits of a properly-organized and well-maintained plan.

If you have younger members of your family, consider including them in your estate planning discussions and decisions once they are old enough to understand the process. This keeps everyone on the same page so there are no surprises after your death.

So when should you revise your plan? Following are some instances where you may consider making alterations to your estate:

  • Major changes in tax laws or estate laws
  • Significant changes in your net worth
  • Development of a terminal illness, permanent incapacity or other health issue (yourself or your children)
  • Desire to change executor or trustee due to illness, death, proximity, or loss of contact
  • Changes in your charitable wishes
  • Marriage or divorce (yourself or your children)
  • Children added to your family (birth, adoption, marriage)
  • Financial difficulties of yourself or your children
  • A move to another state or country
  • Spouse or child develops an addiction (alcohol, drugs, gambling)
  • Death of a spouse or child
  • Adult child become financially dependent upon you
  • Loss of contact with child

Important note: updating your estate plan includes more than making changes to your will. An estate plan review may include all or any of the following:

  • Revocable Living Trust
  • Irrevocable Living Trust
  • Special Trusts (special needs, marital trust, etc.)
  • Durable Power of Attorney for financial and business matters
  • Advance directive/healthcare
  • Beneficiary designations on life insurance and retirement plans
  • Bequesting of other assets
  • Gifting strategies to reduce your estate size
  • Charitable giving strategies

As you can see, proper maintenance of your estate plan is vital for organizing your financial affairs and protecting your family’s future. A financial professional can help you design and make revisions a plan that will help you live life to the fullest, while ensuring your heirs will get the most out of the assets you have designated for them.

Imagine the peace of mind you’ll have, knowing you regularly took the time to update your legal documents, make important decisions about other financial affairs, and plan for the future of your loved ones.

Author Ron L. Brown, CFP®

Ron is a CERTIFIED FINANCIAL PLANNER™ and President of R.L. Brown Wealth Management. He specializes in retirement, estate, and business planning for professionals and entrepreneurs. Ron assists his clients with creating a financial plan to ensure they are able to live their ideal lifestyle during retirement and leave a strong legacy for their family. Ron has been featured in The Wall Street Journal, US News, Yahoo Finance, Investopedia, and numerous other high profile financial publications.

More posts by Ron L. Brown, CFP®
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