Too often, people fall into the trap of crafting a comprehensive estate plan and then leaving it locked away in their safe deposit boxes for years and decades to come. In fact, individuals should review and revise this set of documents at regular intervals to ensure their decisions still reflect how they want various situations handled.
While the estate plan should be reviewed every three to five years, it is also wise to thoroughly update the plan after any significant life event. Significant life events can be different for every individual, but common examples can include:
- A change in marital status: Whether it is a new marriage or a divorce, it is wise to update the estate plan documents to reflect your new life. Removing a former spouse from the will, powers of attorney and any insurance documents is crucial.
- A new child in your life: Whether it is the birth of a child, an adoption or children of marriage, it is wise to add them to your estate plan. Create a minor trust immediately and you can update it when necessary. Individuals can also add children as beneficiaries as soon as possible.
- A death in the family: You should revise your estate plan after the death of a loved one or the death of an individual named in the documents. This can be the loss of a beneficiary, the loss of an executor or the loss of someone given power of attorney.
Additionally, a change in relationship can trigger estate plan revisions. It is not uncommon for friends to fall out of favor, new friendships are created or an individual proves himself or herself worthy of guardianship or power of attorney. These documents should reflect your current status.