The controversial truth is that a stale estate plan is often more dangerous than having no plan at all. It really is. People think that once they sign that thick stack of papers at the lawyer’s office, they are “done” for the rest of their lives. That’s a total fantasy. I’ve seen families torn apart because a patriarch left everything to an ex-wife he hadn’t spoken to in fifteen years. It’s a mess. Truly.
Your life changes. Your documents shouldn’t stay frozen in time while the world moves on. If you treat your will like a “set it and forget it” slow cooker, you’re going to end up with a burnt inheritance.
Every three to five…
The standard check-up. Most professionals, including myself, recommend a basic review every three to five years. This doesn’t mean you have to rewrite the whole thing. It just means you need to sit down with a cup of coffee and make sure the names still make sense.
The actual reality of the situation is that your perspective shifts as you age. You might have been close with a specific cousin five years ago, but now you can’t remember their last name. (Aside: I actually forgot my own anniversary last month, so I’m the last person to judge anyone for a memory lapse, but your legal documents aren’t as forgiving as my wife was.) Gosh! It’s better to catch a naming error now than have a judge try to figure it out later.
When the family tree…
Major life events. This is the big one. If you get married, divorced, or have a child, you need to update your plan immediately. No excuses.
Actually—wait—before I get into the kids, let’s talk about deaths. If your named executor passes away, your plan is suddenly a ship without a captain. You need to name a successor. It’s a critical “future plan for the future.”
- Birth or adoption of a grandchild.
- Marriage or remarriage of a beneficiary.
- A fallout with a family member (it happens!).
- Children reaching the age of majority.
If the tax man…
Changes in the law. The government loves to tinker with the tax code. What was a perfectly legal tax-saving strategy in 2018 might be a liability in 2026. Stay sharp.
Fragment. The federal estate tax exemption fluctuates wildly. Medium length. You might find yourself suddenly under or over the threshold. Very short. If you don’t adjust your trust language to match current IRS regulations, you are basically leaving a tip for Uncle Sam that he didn’t earn. Argh! It’s infuriating to see wealth disappear into tax brackets just because of a missed update.
When the bank account…
Significant financial shifts. Did you sell a business, win the lottery, or inherit a vacation home in Maine? If your net worth changes by more than 20%, you need to talk to your attorney.
You have to protect the “actual facts of the matter” regarding your wealth. If you suddenly have way more money than you did when you drafted the original will, your distribution percentages might not reflect your current wishes. Or maybe you want to start a charitable foundation. You can’t do that with a document that assumes you’re still working a mid-level management job.
Relocating to a new…
Moving across state lines. This is a huge trap for the unwary. Every state has its own specific rules for how a will must be witnessed or how a trust is administered.
If you move from a “common law” state to a “community property” state like California or Texas, your spouse’s rights to your assets change instantly. You might think your out-of-state will is “grandfathered in,” and while it might be valid, it’s going to be a massive headache for your heirs to prove it. Don’t put them through that. Just get a local lawyer to do a quick restatement. It’s worth every penny.
The final gut check…
Health and disability. Estate planning isn’t just about what happens when you die; it’s about what happens if you can’t make your own decisions while you’re still here.
~~You should only update your will when you feel like you are about to die.~~ (Note: By then it’s usually too late—do it while your mind is sharp and your signature is steady!)
If your healthcare proxies or powers of attorney are twenty years old, a hospital might not honor them. They want to see “fresh” documents. It’s a liability thing for them. Take a look at your “Living Will” and make sure it still reflects your feelings on end-of-life care. These are the most emotional interjections of the whole process. Truly. Nobody likes thinking about it, but it’s the kindest thing you can do for your family.
Handwritten-style note: Check your “Beneficiary Designations” on your 401k and life insurance too—those actually override your Will, and people always forget to update them!
