Ideally, an estate plan should be an evolving set of documents. These legal tools should change and grow with you — not remain static. Those who put together an estate plan and forget it are less likely to have an estate plan that truly reflects their desires then those who review the documents and make updates.
When should you take the time to review your estate plan? Four life events that trigger the need for a review include:
- Changes to tax law. One of the goals of an estate plan is to make the most of tax laws. As a result, changes to tax law can directly impact the legal tools used within the plan. The Tax Cuts and Jobs Act (TCJA) was the greatest change to the tax code in decades. Anyone that has not reviewed their estate plan since the law passed in the beginning of 2018 is wise to do so in the near future.
- Changes in familial status. Married? Divorced? Celebrating the birth of a new family member? Mourning the loss of a loved one? After celebrations and ceremonies are complete and you have had some time to process the change in familial statuts, it is wise to review the estate plan. An additional family member may need to be added or distributions may need to be shifted to reflect the change.
- Retirement. Retirement accounts often include beneficiary designations. Individuals are often named when the account is started. Since it is likely decades will pass between starting the account and transitioning into retirement, the beginning of retirement is a good time to review and update these designations.
Additional triggers may apply depending on the goals of your plan. An attorney familiar with your goals and your plan can help you determine the triggers that signal a need to review and update your plan.