Why is regularly reviewing and updating your estate plan important?

We're working on an estate right now that involves a Will that was written in 1986. With a Will this old, this is one of those rare situations where it would actually be easier if the decedent had died without a Will rather than one that had not been updated in 35 years. This is why regularly reviewing and updating your estate plan is important! If you have an estate plan already in place, then you have started off on the right path. If you do not have one yet, it is time to get one drawn up so you can have a plan in place. However, once you have your estate plan made, it is not something that you can just put in a drawer and forget about. We recommend that you review and revise your estate plan every three to five years or after you have had a major life change.

WHAT TO UPDATE IN THIS PROCESS. While some people think that this means you should review your Will, it is not the only thing to take a look at. If you have a comprehensive estate plan, you will need to have all of this reviewed and updated as needed. A comprehensive estate plan can be made up of a variety of documents including a Will, a Directive to Physicians (a "Living Will"), a Revocable Living Trust, a Durable Power of Attorney, a Health Care Power of Attorney, and more. Some other things that may be included are life insurance, retirement plans, and business succession plans if you own a business. As you can see, this can be a big process, especially if you wait too long to update the documents and have a lot of updating to do. If you update as things change, then you will have an easier time and the process will not take very long for you to complete.

REASONS TO UPDATE YOUR ESTATE PLAN. As you approach your review process, on broad terms, you are looking to ensure that your intentions have not changed, that the right people are included, that major life changes are reflected, and that all other major changes are noted. However, there are specific instances where you will want to ensure that you make the necessary changes to your estate plan. These are some of the most common reasons why you may want to update your estate plan:

* Marriage and Divorce. Changes to family dynamics happen all the time. When this happens, you should make sure your estate plan reflects these changes. For example, if you have recently gotten married, then you should ensure that your estate plan includes your new spouse. If you have been married before, another thing to remove from this plan is your ex spouse if you have not done so already. Additionally, you should get your estate plan updated if you have gotten divorced. Hopefully you have done this before getting married again, and you should keep this in mind as a trigger for an estate plan update. You do not even have to get married to trigger a review and revision of your estate plan. In fact, if you want to care for your partner and you are not married, now is a good time to ensure that this happens. This is important because if you are not legally married, then your partner may not get anything if it is not specifically laid out in your estate plan.

* Children. If you have children, you may also want to revisit how they are taken care of in your estate plan to make sure it is set up exactly how you want it now that you have a new family dynamic. If your new spouse has children from a previous relationship, then you may also want to include your stepchildren in your estate plan. Stepchildren are not typically included as beneficiaries of an estate plan unless the plan specifically mentions them, so you will need to take the time to include them if you wish to do so. Your estate plan will include all of your children, which includes both your biological and adopted children. The only exception in this case is if you wish to disinherit someone. If you want to disinherit a child or spouse, you will need to make sure that this is included in your estate plan. This is an important thing to do if you do not want someone in your immediate family to get anything as part of your estate plan.

Whenever your family tree changes, you should have your new child added to your estate plan. You will also want to outline in your estate plan who should be their guardian if you are no longer around. On the same point, if you are unhappy with who you have chosen to be the guardian of your children, you need to ensure that this is changed in your estate plan as soon as possible.

* Changes to Beneficiaries. If you decide that you want to change your beneficiaries, you will want to do this in all areas of your estate plan. You need to do the same if you wish to remove a beneficiary. If any of your beneficiaries have passed before you, you should revise your estate plan so that you can include new beneficiaries and/or redistribute property among your current beneficiaries. If any of your beneficiaries have had any changes to their care and their needs, you may want to include a way for you to provide for that care after you are gone. For example, if any of your beneficiaries require special care, you will want to outline how you will take care of these or who you want to manage the care after you are gone.

* Tax Changes. If you have moved from one state to another recently, your estate plan needs to be reviewed to ensure that it complies with all state laws. In this case, you should review it with an estate planning lawyer in the new state since they will be more familiar with the local laws. Even if you have not moved to a new state, Congress and state legislatures are constantly changing the tax laws. Keep in close contact with your lawyer to ensure that your estate plan is compliant. An experienced lawyer will keep tabs on this for you, but it is always a good idea to periodically check it or make the call to review it if you learn of any new laws.

Another change that can impact your taxes is when your assets change. If the size, nature, or value of your assets has changed, you need to take a good look at your estate plan and update accordingly. Whether or not you add these to your Will or Trust is something that you will want to discuss with your lawyer or financial planner. There may be a benefit of adding it to a Trust so it can avoid probate or take advantage of certain tax laws, but there are numerous factors that can play into this. Either way, you should revise your estate plan to reflect the current state of your estate.

* Other Various Changes. A lot of the changes fit into specific categories, but there are some that are unique and cannot be placed in these broad categories. These reasons are just as important when it comes to determining if you should update your will. This list contains a few of the other reasons you need to change your estate plan:

(1) Do you have a Trust and want to name a new Trustee? As part of your estate plan, you should review and revise your Revocable Living Trust if you want to add a successor Trustee or substitute Trustees. You will need to add it to this component of your estate plan so that your Trustee list is accurate at all times.

(2) Do you want to change your Power of Attorney? If you wish to have a Power of Attorney, whether it is a Durable Power of Attorney or a Health Care Power of Attorney, you will want to make sure that your wishes are reflected. If you want to change it, you can revoke them and appoint a new person to have it. This should always be as up to date as possible.

(3) Do you have a Directive to Physicians set up? If you do not have one already in your estate plan, add one. If you do have one, you should periodically review it to ensure that everything you want in this document is outlined. If you have changed your mind on some things, update this as well.

(4) Do you own a business or plan to open one? If you own a business or plan to open one, make sure that you not only develop a business succession plan, but also decide who will own the business after you are gone. You can even decide who will run your business.

(5) Has it been three to five years since you reviewed your estate plan? If you have not taken the time to review your estate plan in some time, this is reason enough to take a look at it and ensure that there is nothing that needs to be updated that you may have missed during your other reviews, if you have had any. You should review your estate plan with your lawyer on a regular basis.

THE IMPORTANCE OF UPDATING YOUR ESTATE PLAN. As you can see, there are many reasons why you would want to update your estate plan. However, it is also important to do this in a timely manner. If you fail to review and revise your plan when you have had a life change or change of heart for some reason, your estate could end up in the hands of someone that it is no longer intended for. No matter what your reason is for revisiting your estate plan, your lawyer will ensure that it is valid and that the changes you are making are compliant with all local laws. The last thing you want is for someone to not get what you wanted them to have simply because you did not discuss changes with your lawyer or have this updated on your various estate planning documents.

Make any changes as soon as you have a change or you have decided that you want to change your estate plan. There is no sense in waiting, because completing this as quickly as possible will help put your mind at ease. If you do not already have a plan in place, work with an estate planning lawyer to get your documents drawn up as soon as possible, especially if you have assets that you want to go to some beneficiaries. You can add documents to your estate plan that are relevant, and you will not have to do anything that fails to serve any purpose for your estate.

If we can be of service to you, your family, friends, neighbors, or coworkers, give us a call at 253.858.5434 to set up an appointment today. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.