What if I Haven’t Updated My Estate Plan in Years?
It’s tempting to create an estate plan and assume the job is finished. However, as life changes, an estate plan that hasn’t been reviewed in years may no longer reflect your current family situation, financial circumstances, or wishes.
Periodically reviewing your estate plan is an important part of an overall financial plan, helping you identify common life changes that signal it’s time for another look.
Life Changes That Trigger a Review
A routine estate plan review should occur every three to five years to accommodate changes in tax laws and evolving personal goals.
That said, it’s important to evaluate and update your estate plan after each major milestone to help ensure your assets and loved ones remain protected.
- Marriage or divorce
- Birth or adoption of a child
- Death of a loved one
- Retirement or major career change
- Relocation to another state
- Significant changes in assets
Review Beneficiary Designations
Beneficiary designations dictate who receives your assets and prevail over any other instructions in your will or trust. As such, it's essential to review how you want your financial assets distributed.
Why Reviewing Beneficiary Designations Matters
- Designations override wills and trusts: You may have changed your will after a divorce, but if you neglected to remove your ex-spouse as the beneficiary on a life insurance policy or retirement account, the financial institution is legally obligated to give the money to the person named on that document.
- Avoiding probate: When your accounts have designated beneficiaries, there’s no need to go through the slow, public probate court process, allowing your loved ones to receive the funds sooner.
- Major life changes: Any major life change should trigger a beneficiary review to ensure you provide for your loved ones.
- Family conflict prevention: Confusion, family conflicts, and costly legal battles often arise in the absence of updated and accurate beneficiary names.
Regularly Review All Legal Documents
In addition to ensuring your beneficiary information is up to date and accurate, it's also important to routinely evaluate the accuracy of your legal documents, including:
- Wills and Trusts: Confirm that guardians for minor children and asset distributions reflect your current intentions.
- Powers of attorney: Verify that the individuals you’ve selected to manage your legal matters—in the event of your incapacitation—are still trustworthy and able to carry out their duties.
- Healthcare directives: Ensure the person chosen as your healthcare spokesperson is still a viable choice, and that you use accurate medical terminology to voice your preferences and end-of-life instructions.
Document Organization and Accessibility
One of the best things you can do to prepare for an emergency is keep important documents organized and easily accessible to your loved ones.
- Keep essential records in a secure, fireproof, and waterproof safe: financial documents, wills, certificates
- Back up all records digitally: provide your trusted representative with access and passwords
How a Financial Advisor Enhances an Estate Planning Team
While your attorney manages the legal framework of updating an estate plan, a knowledgeable financial advisor can help organize your assets and ensure your broader financial plan aligns with your wishes.
- Wealth preservation and tax efficiency strategies
- Coordinated legal and financial planning
- Comprehensive financial guidance
Contact the CrossleyShear team to discuss how we can help coordinate your estate planning goals with your broader financial plan.
Every investor's situation is unique, and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Dale Crossley and Evan Shear and not necessarily those of Raymond James.
Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional
