Unfortunately, creating an estate plan is not enough. In order to make sure that your plan is up to date, it is recommended that it be reviewed every few years. The need for periodic review was discussed in a Time article, “Estate Planning Checkup: 3 Items to Review Now”. Below are the three recommended items to review:
- Estate planning documents. Any types of estate planning documents that you may have (wills, trusts, durable powers of attorney, health care directive, etc.) will need to be updated if there have been any major changes in your situation. For example, moving to another state, purchasing real estate, or a significant change in the value of your assets will likely result in a need to update your estate plan. Health issues with you or with your family are also cause for review. Finally, make sure that the loved ones you named as beneficiaries and agents are still appropriate. If those relationships have changed, it may be time for an update.
- Life insurance coverage. Life insurance can be critical to any estate plan, especially if you have loved ones that depend on your income. With a life insurance review, the main concern is whether or not your beneficiary designations are up to date. Any changes in the family or relationships may illicit a change.
- Review your assets. Your assets should work seamlessly into your estate plan, especially if you have a trust. Doing so simplifies the handling of your estate for your heirs or if you become incapacitated or upon your death.
Having a good estate plan is a critical first step in providing peace of mind for you and your loved ones. However, make sure you update it to maintain its effectiveness.