When do I need to review my estate plan?

When do I need to review my estate plan?

July 4, 2014 Mike Sperling Leave a comment

Although there’s no hard-and-fast rule about when you should review your estate plan, the following suggestions may be of some help:

  • You should review your estate plan immediately after a major life event
  • You’ll probably want to do a quick review each year because changes in the economy and in the tax code often occur on a yearly basis
  • You’ll want to do a more thorough review every five years

Reviewing your estate plan will not only give you peace of mind, but will also alert you to any other changes that need to be addressed.

There will be times when you’ll need to make changes to your plan to ensure that it still meets all of your goals. For example, an executor, trustee, or guardian may change his or her mind about serving in that capacity, and you’ll need to name someone else.

Other reasons you should do a periodic review include:

  • There has been a change in your marital status (many states have laws that revoke part or all of your will if you marry or get divorced) or that of your children or grandchildren
  • There has been an addition to your family through birth, adoption, or marriage (stepchildren)
  • Your spouse or a family member has died, has become ill, or is incapacitated
  • Your spouse, your parents, or other family member has become dependent on you
  • There has been a substantial change in the value of your assets or in your plans for their use
  • You have received a sizable inheritance or gift
  • Your income level or requirements have changed
  • You are retiring
  • You have made a change in your estate plan (e.g., you created a trust or executed a codicil to your will)


Periodically I like to remind my clients to think about their estate plans and any changes that may be needed. But, unfortunately, not all estate planning attorneys follow this type of process. here’s a list of the top six reasons why you should consider updating your estate plan.

  1. Change in Marital Status

A change in your marital status will require significant changes to your estate plan. If you’ve recently married, then a whole new set of gift and estate tax planning opportunities have become available to you and your new spouse, including tenancy by the entirety, community property, Trusts, children and step children. Some of these new options will depend on if you own real estate and if children are involved. Or, if you’ve recently divorced, then your estate plan should be updated to insure that your former spouse is removed as a beneficiary and fiduciary and you’ll also need to update the beneficiary designations for your life insurance and retirement plans, including IRAs and 401(k)s, to insure that your spouse is removed there as well.

  1. Change in Financial Status

A change in your financial status will require significant changes to your estate plan. If you’ve recently won the lottery or received an inheritance, then you’ll need to reevaluate if your estate is taxable at both the state and federal levels and, if it is, then explore techniques that will minimize these taxes. You should also fund your winnings or inheritance into your Revocable Living Trust so that these assets won’t need to be probated. Aside from this, you should segregate your winnings or inheritance from your marital assets if you don’t want them snatched up in a divorce. On the other hand, if your estate has declined in value, then you should review your plan to insure that it still makes sense in view of your lower net worth.

  1. Birth,  Death or Change of Circumstances regarding a Beneficiary or Fiduciary

If a beneficiary or fiduciary named in your estate plan has died, then you should update your plan to remove the deceased person’s name. If you don’t, then years from now your Personal Representative or Successor Trustee will have to track down an original death certificate for the deceased person, and this can become time-consuming and costly. If your spouse has died, then your plan may need to take on a whole new structure. On the other hand, if you or a beneficiary has adopted or had a child, then you should review your plan to insure that the new child is, or perhaps isn’t, included. Suffice it to say that the birth or death of a beneficiary or fiduciary will most likely lead to significant changes in your estate plan.   Circumstances in your life or the beneficiaries or fiduciary’s life may change the manner in which they are treated in your estate plan.   While significant changes in your own life will require changes in your estate plan, so will changes in the lives of your beneficiaries or fiduciaries. If your children were minors when you initially set up your plan, then as they get older you should assess whether they’re ready to be named as your fiduciaries. If a beneficiary or fiduciary moves away or you simply lose touch with them, then you should reevaluate your plan to insure that your property is still going where you want it to go and that you’ve named the right fiduciaries. Suffice it to say that you should monitor the changes in the lives of your beneficiaries and fiduciaries to determine if these changes will have any affect on the goals and structure of your estate plan.


  1. Purchase or Sale of a Business

If you have recently purchased a business, then you should meet with your estate planning attorney to insure that your estate plan is structured properly to deal with the business if you become disabled or after you die, and also to put together a comprehensive business exit plan. On the other hand, if you’ve recently sold a business, then you should meet with your estate planning attorney to insure that your plan is properly structured now that you don’t own a business, that the sale proceeds are titled in the name of your Revocable Trust, and to determine if your estate is no longer, or has become, taxable. If it has become taxable, then you’ll need to figure out how the taxes will be paid as well as ways to minimize the estate tax bill.

  1. Moving to a New State

Moving to a new state is one of the most important reasons to update your estate plan by meeting with an estate planning attorney in your new state. Why? Because state laws dictate what estate planning documents need to include and how they need to be signed. The last thing that you want is for your estate plan that would have worked well in your old state to be declared ineffective or simply invalid in your new state because of one wrong provision or one missing signature. Aside from this, if you move from a state that imposes an estate tax to one that doesn’t, or vice versa, then your plan will need to be updated to take into consideration this change in the taxable status of your estate.

  1. Bankruptcy, Incarceration or Disability

If you, your spouse a beneficiary or fiduciary have suffered one of life’s unfortunate events you will need review your estate plan.

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