Creating an estate plan is a significant accomplishment, but it is not a “set it and forget it” task. Life changes constantly, and your estate plan should reflect your current circumstances. So how often should you revisit and update these important documents?
When major life events occur
The most critical times to review your estate plan are when significant life events happen. Getting married or divorced, having children or grandchildren or experiencing the death of a beneficiary are all situations that warrant immediate attention to your plan.
You should also consider updates when you acquire substantial assets, start a business or experience significant changes in your financial situation. If you move to a different state, that is another important trigger since estate laws vary by location.
Changes in your relationships matter too. If you have named someone as your executor or healthcare proxy and that relationship has soured, you will want to adjust. Similarly, if a guardian you have designated for your minor children is no longer suitable, you need to address that right away.
The three-to-five-year rule
Even if nothing dramatic has happened in your life, estate planning experts generally suggest reviewing your plan every three to five years. Laws change, tax regulations evolve and your wishes may shift over time.
During these regular reviews, you can ensure your beneficiary designations still make sense and that the distribution percentages reflect your current intentions. You might also want to verify that your chosen fiduciaries are still willing and able to serve in their designated roles.
Why you should not wait too long
While you do not need to obsess over your estate plan constantly, leaving it untouched for a decade or more could create problems for your loved ones. Outdated plans can lead to unintended consequences, family disputes or assets going to people you no longer wish to benefit.
Think of your estate plan as a living document that grows and changes with you. By staying proactive and making updates when circumstances warrant, you will have peace of mind knowing your executor will carry out your wishes as you intend. Consider setting a reminder to review your plan every few years. You might also want to consult an attorney for clarity when questions arise.