Many sources estimate that only half of older adults have created a will. And even fewer still have a comprehensive estate plan—which should incorporate a living will, health care power of attorney and financial power of attorney at minimum. No matter what your age, it’s a good idea to have discussed and made the important decisions that go into these plans, and put those decisions in writing.
Congratulations are in order for those who have made those decisions, but even so, their work is not complete. All sorts of things can change over the course of our lives—and some of those changes may affect existing estate plans.
Experts recommend that you review your estate plan every few years to confirm whether it needs updating. Why? Because things change over time—from tax legislation to the number of your grandchildren. Whether you have a simple will or a revocable living trust, here are 6 reasons to re-evaluate your estate plan regularly:
New family members and friends. Is there anyone new in your family or circle of friends who you would like to add as a beneficiary, trustee, or inheritor? Consider new grandchildren and in-laws, or charitable organizations you may have recently become involved in.
Former family members and friends. Perhaps you want to exclude someone currently in your will or trust, such as an ex-spouse or other ex-in-laws.
Your choice of executor or co-trustee. Imagine a couple who drew up their estate plan and created a trust when both in their 50s. Today, they are both in their mid-80s and still listed as co-trustees. They might want to reconsider this plan, and name their children or younger people as “caretakers” of the trust. Consider the current age, geographic location, abilities and skills of the executor and/or co-trustee you had originally chosen, and whether those individuals are still the best candidates.
Assets. Does your will and/or trust still apply to the assets you have today? If your assets have increased or become more complex, you might consider adding a trust, drawing up a more detailed will, or consulting with experts who can help assess your needs.
Values. There’s more to estate planning than just finances—evaluate the decisions you had documented regarding your health care and Advance Directives (such as a Do Not Resuscitate order) to see if you’d like to change anything.
Tax law. Occasionally, changes in tax laws may require updates to trusts—possibly resulting in greater benefits. And estate-planning documents do change over time. Today, estate planners recommend that everyone have a health care power of attorney and a financial power of attorney. People who have a general power of attorney may find that if it is more than one year old, most institutions will not recognize it, on the grounds that factors (like those listed above) may have changed.
And don’t forget one last step—once your estate plan has been updated, be sure to let your family know what documents you have drawn up and where they can find them (such as at your attorney’s office). No one has to know what’s in your will or trust, but someone needs to know it exists. Keep your living will somewhere easy to find, and give copies to appropriate family members, along with copies of your health care and financial powers of attorney.
Taking these extra steps may seem like a burden, but having an up-to-date estate plan ensures that the time, thought, and money you put into your planning will ensure that your wishes are put into action.