Make estate plan review a matter of habit

Many in New York City don’t have wills. Few have any valid excuse for being in that situation. If you work, are investing money for retirement and care for the welfare of your family, you should have a plan. If you have complex assets, it is even more important to create a plan. If you are one of those who has good planning intention but hasn’t followed through, it’s time to get a move on.

And once you have cleared that hurdle, consider developing a habit of performing regular reviews, because as good as that plan is today, it might not be tomorrow. The general guidance from many experts is that you plan deserves review every three to five years. It can be done more often than that and should certainly be done whenever a major event in life takes place.

Of course, what too often happens is that those events take up every bit of life bandwidth and the estate plan gets shunted down until it drops out of sight. The result then can be that your plan doesn’t serve those you intended to benefit, creates disputes and subjects your assets to unnecessary taxation.

Those with depth of experience in this area of law appreciate that one key trigger of estate plan errors centers on improper management of beneficiary designations.

In today’s culture, family structures can change quickly by death or divorce, by birth or adoption. It doesn’t take much for beneficiary intentions to get corrupted. It can happen if you divorce, remarry, and your retirement account still lists your former spouse as beneficiary. Even if you changed your will to remove that spouse from inheritances, the beneficiary designation stands.

Computer or system updates are another fact of life today, and changes in systems can have unexpected side effects. A change in a system at any entity with a tie to the plan, whether it is an administrator, financial advisor, fund manager or company, could see a name dropped or some other such glitch.

In light of the above, getting into the habit of regular plan review makes sense. If you can’t bring yourself to set a schedule, consider taking your prompts from outside. Such things as premium notices from insurance companies or annual earnings reports from retirement accounts could do the trick.

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