Update your Estate Plan – How often and when should you make changes?

The purpose of having an Estate Plan is to have a set of documents that reflect your current wishes for distributing your assets. The thoughts you have today are likely going to change, even if just slightly, throughout your life. Odds are that in 20 years, you’ll have accumulated more assets or had a significant life event that would cause you to reconsider your plan.  

An Estate Plan is intended to be fluid and evolves with you over time. You create a plan for the distribution of your estate that reflects your wishes when you sit down to make your plan. The Revocable Living Trust is a fantastic tool to make your plans for today and adapt to the changing environment in which you live. 

How often should you update your Estate Plan, or how frequently should it be reviewed? The answer is somewhat two-fold. 

1.     Schedule of Assets

Your Schedule of Assets is a comprehensive list of your assets that is included in your Trust documents. The Schedule of Assets needs to be reviewed at least annually to ensure it reflects the current breakdown of your assets. Every time you change bank accounts, open a new investment account, purchase a new piece of real estate, change over retirement accounts, the Schedule of Assets needs to be updated. This updating is crucial as there are ways to utilize the Schedule of Assets as a “catch-all” to ensure that assets may not be adequately titled do not end up in Probate Court. 

2.     Life Events

There are certain life events that should require a reassessment of your plans for distribution.

Marriage: If you created your Estate Plan as a single person and subsequently got married, you will need to review your plan. This is especially true for California residence as we are a community property state.

Divorce: Likewise, if you created your Estate Plan when you were married and got a divorce, you will want to update your plan. After a divorce, it is likely your priorities have changed. Absent a review and revision; assets could end up in the hands of the ex-spouse after a divorce. 

Children: The addition of children to the family could impact the way you wish to have your assets distributed. An equal split among the children is standard; however, there may be one child that needs extra funds to finish their education that would impact the way you distribute. 

Grandchildren: As you age and your family grows, you may wish to add gifts or distribution directly to your grandchildren. Your children are now grown and self-sufficient and may not necessarily need an inheritance, and now you intend to leave some to the grandchildren to fund their college or start a business. 

Estrangement: There could have been a falling out in the family, causing a level of alienation from a beneficiary. In this situation, you may be considering writing that individual out of your Estate Plan. 

Death: Death is a certainty. While you always hope to outlive your children, that is not always the case. Planning for the event that a beneficiary predeceases you in the initial Estate Planning is highly recommended; however, the death of a beneficiary itself may cause you to reflect and wish to make a change in your structure.

Philanthropy: You may have found a specific cause or organization that is near and dear to your heart and wish to contribute. Donations are easily designated through a Revocable Living Trust through either a gift off the top before distribution or as an alternative recipient if all the listed beneficiaries are dead.  

Regularly reviewing the plan and your assets are vital to the nature of Estate Planning. Thoughtful consideration from the beginning may avoid unnecessary changes over time. Significant life events may impact your wishes and intended distribution requiring amending or modifying sections of your Trust. Consult with an experienced Estate Planning attorney to ensure that your plan indeed reflects your goals.

About The Law Office of Natalie A. Miller

Natalie A. Miller is licensed to practice law in California. Information presented on US laws. This article is legal information and should not be seen as legal advice. The opinions contained herein are those of Natalie A. Miller and not of any other organization. The information contained herein does not create an attorney-client relationship nor a requirement that Natalie A. Miller take you on as a client.