Tuesday, February 27, 2018

When to Update an Estate Plan

We advise that estate planning is an ongoing process and that our clients should not simply put documents in the drawer and forget about them. Part of that ongoing process is a need to review and, if necessary, update documents on a regular basis. Our clients often ask us, "How often should I update my documents?"

When it comes to keeping an estate plan up to date, there is no one-size-fits-all answer, because a client’s need to update documents is related to when things change in the client's life. For some clients there is a need for annual review and updating the documents to reflect changes in asset ownership, gifting to loved ones, charitable inclinations, or desires to change their beneficiaries. For other clients, for example those with young children, fewer changes may be necessary though it is important to ensure that the designees named to serve as Guardians and Trustees remain current with the people that a client wants to raise and provide for their children.
There are a number of life events that may give rise to the need for amendments or other changes to estate planning documents, including births, deaths, changes in employer/retirement, and in geographic relocation. Depending on how documents are structured and whether various life events were taken into account in the drafting of documents, any of these events can create the need for significant updates.
While most estate plans automatically take into account the birth of additional children, unless the client has designated successors, the death of a successor trustee, attorney in fact, or patient advocate means that it is time for an update. The same is true if the client simply no longer wants their original designee involved. Failure to update designees may delay or derail the administration of an estate or Trust.
As we touched on previously, in general estate planning documents do not “expire”. A Will drafted in 2018 is as good as one drafted in 1968, but documents can get “stale.” A stale document is one that has not been updated in many years and especially in the case of Powers of Attorney and Patient Advocate Designations, a stale document can make administration more difficult. Financial institutions, doctors, and others may be reluctant to follow the instructions of a designee relying on a ten year old document, worrying that the Principal may have executed a contradictory document in the interim or, because of time, may not want that person designated to exercise power. Refreshing documents regularly keeps them current with laws and helps avoid conflicts with anyone accepting the documents as proof of authority
We recommend reviewing documents at least once a year to confirm whether or not changes are necessary. When in doubt if a change is needed, an experienced estate planning attorney can provide you with the guidance you need to avoid putting yourself or your loved ones into a difficult position.

Matt and Al

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