You finally created your estate plan. Sitting down and hashing out all the details was a lot of work, but now that your estate plan is set, you can rest easy knowing you and your family will be taken care of if something should happen.
However, your work is not done yet. While a large part of the work of estate planning is in creating it, you still need to update your plan periodically in order for it to be the most effective.
But when do you need to make changes and update your estate plan?
Significant life changes
Whenever a large change in your life occurs, you should review and update your estate plan. Marriage, divorce, birth of a child or death in the family are all life changes that could prompt an update to your estate plan. You may need to add or remove someone from your will or create a new trust.
Financial changes to your life should also prompt you to change or update your estate plan. Receiving a large inheritance, starting or selling a business and other large investments should also cause a change in your estate plan. You want your estate plan to accurately reflect your assets, so nothing is left out.
In addition to checking an estate plan due to these events, you should also regularly check your estate plan. Tax laws change relatively frequently and you need to make sure your plan follows all regulations. It is good practice to check your estate plan every few years or every five years max.
While you may not want to review your estate plan or put in even more work, regularly checking and updating your estate plan will benefit you and your family in the long run. If something happens to you and your estate plan is outdated, it may not be effective and likely won’t help you or your family the way you intended.