Family and financial situations change, laws may change, three or more years may have passed since a person wrote or reviewed their estate plan. All these factors necessitate making changes to an estate plan.
Changes in Law
Changes can occur in tax laws and other laws related to a person’s estate, such as advance medical directives and powers of attorney. When a person hears of such changes through a trusted advisor or in the news, it is important that the person reviews their estate plan with an estate planning lawyer to understand the impact of the changes.
Passage of Time
People should reassess their estate plans with their planners every three years. Regularly reviewing an estate plan helps one determine if they need to make any updates to make the plan reflect their current life and goals.
Change in Assets or Liabilities
The value of a person’s estate may have changed significantly since the time the plan was drafted. A person may have acquired or sold an asset, such as a business or real estate. Such changes warrant a review of the estate plan.
Moving to a Different State
Each state has its own estate planning laws. Therefore, one should not assume that the elements of their estate plan created in the old state will conform to the new state’s requirements. The documents should be updated to be effective in the new state.
People who move from states with estate or inheritance taxes should establish proof that they have changed their legal residence. Many states with these taxes usually assert that people have not changed their residence, so their estates are still taxable in their previous states.
Changing Family Situations
Significant changes could happen to a person’s family. As a result, it is essential for one to alter their estate plan to reflect the changes. Some of these changes include:
- Adoption or birth of children or grandchildren
- Marital status changes
- Death of a family member or guardian for a person's children
As a result of changing circumstances, a person’s work is not done once they establish an estate plan. People should take estate planning as a journey rather than a destination.