How often should you review your estate plan?

Hopefully, you already have a sound estate plan in place to protect the interests of your heirs and minimize potential estate tax liability. But that doesn’t mean you’re completely in the clear. You can’t just fill out the paperwork, lock up the documents in a file cabinet or store them electronically, and forget about it. Consider your estate plan to be a “work in progress.”

Notably, your circumstances could be affected by certain life events that should be reflected in your estate plan. And the plan should be reviewed periodically anyway to ensure that it still meets your main objectives and is up to date. Although you can examine the plan at any time, it's important to make sure you are checking your plan regularly, whether that's at the end of the year, the start of a new year, or a date of your choosing. 

Reflect life-changing events

What sort of life events might require you to update or modify estate planning documents? The following list isn’t all-inclusive by any means, but it can give you a good idea of when changes may be required:

• Your divorce or remarriage,
• The birth or adoption of a child or grandchild,
• The death of a spouse or another family member,
• The illness or disability of you, your spouse or another family member,
• When a child or grandchild reaches the age of majority,
• When a child or grandchild has education funding needs,
• Changes in long-term care insurance coverage,
• Taking out a large loan or incurring other debt,
• Sizable changes in the value of your assets,
• Sale or purchase of a principal residence or second home,
• Your retirement or the retirement of your spouse,
• Receipt of a large gift or inheritance,
• Sale of a business interest, or
• Changes in federal or state income tax or estate tax laws.

As part of your estate plan review, examine the critical components — including the key legal documents incorporated within the plan.

Update your letter of instruction

As you review your estate plan, be sure to reread your letter of instruction and make any necessary revisions. Although a letter of instruction isn’t legally binding, it can be incredibly useful.

The letter may provide an inventory and location of assets; account numbers for securities, retirement plans, IRAs and insurance policies; and a list of professional contacts that can help your heirs after your death. It may also be used to state personal preferences (for example, specifics for funeral arrangements).

Have your updates made

Once you've identified any items that should be changed, you should arrange to have the necessary adjustments made as soon as possible. We can also help you complete your review and make any needed updates.