If you do not yet have an estate plan, creating one can be very beneficial. But even if you’ve already drafted a plan, don’t fall into the trap of thinking that the work is entirely done. An estate plan isn’t something you create and then forget about. From time to time, it’s wise to review the plan and see if any updates are needed.
How should you address these periodic reviews? There are two main schools of thought, both of which can work.
1. Reviewing it on a schedule
The first option is to schedule your reviews. Perhaps you want to go over the plan once a year. Some years, you may find that everything still works, and you don’t need to make any updates. But in other years, you may discover changes are needed—such as reallocating assets or making healthcare decisions. While your estate plan can still get outdated, reviewing it on a schedule helps ensure it’s always up to date within that timeframe.
2. Reviewing it after life events
The second approach is to identify life events that may signal a need for updates. Examples include getting married, getting divorced, the death of a beneficiary, the birth of a grandchild or receiving a serious medical diagnosis. Any time something significant happens, you can quickly review and update your plan so that it’s never out of date.
There are certainly pros and cons to both approaches, and some people may choose to combine them, making updates after life events while also performing reviews on a set schedule. Either way, just be sure you know the legal steps to take.
