When Should You Update Your Estate Plan? Ten Reasons to Do It Now


If you already have an estate plan, you have determined the best way to care for the loved ones you leave behind. However, like any good strategic plan, your estate plan needs to be updated from time to time. Both internal and external factors can impact your plans. Regular updates take these factors into account and ensure that the plan reflects your true intent. 

Here are the top eight reasons to update your estate plan now:

  1. Change in desires. You may change your mind about some of your earlier decisions.
  2. Changes to the tax code. Tax law is constantly changing. Updates guarantee that your estate benefits from the most advantageous tax treatment.
  3. Changes in your family. You or other members of your family may have divorced, in which case provisions for ex-spouses may need restructuring. Or, if a marriage has taken place, your will does not automatically provide for the new spouse or protect children from a former marriage. If a child has been born to you, your guardianship desires for that child need to be added. In the case of new grandchildren, you may choose to make special provisions for things like their education.
  4. Illness. Should you or a member of your family become seriously ill, you may want to revise your will to cover additional costs such as long-term or nursing home care. Or, if someone in the family has special needs, assets can be protected in a trust that does not disqualify them from receiving government benefits.
  5. Change in assets. Different kinds and amounts of assets benefit from different estate planning opportunities and challenges.  Succession planning, discounted gifting or an inheritance can all provide opportunities to reduce taxes and provide creditor protection.
  6. Change in residence. Maybe you are a “snowbird” and move south to avoid those long, hard northern winters. Different states have different estate laws. While your will is valid wherever you go, moving between a separate-property state and a community-property state affects how your estate is taxed when one partner is deceased.
  7. After the death of a loved one. If you left a significant portion of your estate to a spouse, another heir or dependent, and they die before you, you need to update your will to reflect a new recipient.
  8. Your executor dies, becomes incapacitated or your relationship changes.
  9. Supplemental Needs Trust.   Your executor should direct, in your Will, to distribute any social services dependant beneficiary’s bequest under your Will into a Supplemental Needs Trust, so that a bequest to such a beneficiary under your Will does not disqualify that beneficiary from benefits such as Medicaid, Veterans or SSI benefits which he or she may be receiving, or about to become eligible to receive, at the time of the distribution of that bequest under your Will.
  10. Durable Power of Attorney and Health Care Proxy.  As important as a Will, sometimes more so, is a Durable Power of Attorney, with appropriate Medicaid compliant powers, and Health Care Proxy, and to update these documents periodically.

According to the AARP, the federal tax rate on estates is slated to change — yet again.  One of life’s greatest rules is that nothing stays the same. Update your estate plan to ensure that your wishes are carried out after you are no longer here.