Three times you should update your estate plan

clock.jpgPhoto cred: Monoar Rahman

Estate plans help to ensure financial security for generations. They are easy to put off and, once finally completed, easy to forget. But certain life events can trigger the need to update your plan, and the failure to do so can result in unintended consequences.

The following list is not exclusive, but here are three examples of times when an update may be advisable:

  • Major life events. Marriages, divorces, births, and deaths of loved ones should trigger a review of an estate plan. Adjustments can be made to include new members, or to exclude those who are no longer part of the family.
  • Changes in business. In addition to major personal life events, professional changes can also trigger a review. The addition of business interests, for example, should be addressed within the plan.
  • Getting older. An estate plan that was made twenty years ago is unlikely to meet your current needs. Even if there were no significant life or professional events during this period, it is still wise to review the plan and adjust as necessary. Perhaps the original plan nominated guardians for your minor children but did not nominate an agent for your own health care decisions. Now is a good time to bring the plan up to date.

Ideally, an estate plan should be reviewed on a regular basis. As noted in a recent piece in Advice for Investors, a good rule of thumb is to review a plan once every five years. This review is best conducted with the counsel of an experienced estate planning attorney. This professional can help adjust the documents to meet your needs and tailor the plan to help reduce any risk of surprises in the future.