How Often Should I Update My Estate Planning?
By Jeffrey Meenes, CFP® (Published Date August 29, 2024)
Estate planning strategies for the future are crucial for securing the well-being of your loved ones as you age and after you're gone. It's not a one-time task but a process that should evolve with your family's changing needs. Regularly examining and updating your estate strategy is critical to ensuring generational financial well-being.
How Often Should I Update My Estate Planning?
Many wonder, "How often should I update my estate strategy?" The general rule of thumb is at least every 3-5 years, if not more often. More importantly, you should review your estate strategy whenever you have a significant life change.
Your estate strategy is a comprehensive set of legal documents that outline your wishes regarding your assets, property distribution, healthcare preferences, and more. However, life is unpredictable, and circumstances can change. Your estate strategy may not reflect your current situation or wishes without regular updates.
Major Life Events That Signal an Estate Strategy Review
While everyone may review their estate strategy regularly at different intervals, certain life events should prompt an immediate review of your estate strategy. Here are some key events to consider:1
Marriage or Divorce - When you get married, you'll likely want to update your estate strategy to include your spouse as a beneficiary. Conversely, divorce may necessitate removing an ex-spouse from your plan.
Birth or Adoption of a Child - Welcoming a new child into your family means updating your strategy to include them as a beneficiary. You'll also want to appoint guardians if something happens to you and your partner.
Death of a Loved One - The passing of a spouse, child, or another beneficiary should prompt a review of your estate strategy to ensure assets are distributed according to your new wishes.
Change in Financial Status - Significant asset changes, whether through inheritance, investments, or property acquisitions, should trigger a review of your estate strategy.
Relocation to Another State or Country - Laws regarding estates vary by jurisdiction. If you move, reviewing your strategy to ensure it complies with local laws is essential.
Changes in Health - If you're diagnosed with a severe illness or experience a decline in health, you should review and update your healthcare directives and powers of attorney.
"How often should I update my estate strategy?" refers to balancing regular reviews and responding to significant life events. While a general timeline of every 3-5 years is a good rule of thumb, life changes should always prompt a review of your estate strategy. Your strategy should reflect your current circumstances, wishes, and the legal landscape. By staying proactive and updating your estate strategy accordingly, you can ensure that your loved ones are taken care of and your legacy is protected.
This content is developed from sources believed to provide accurate information from Meenes Wealth Partners. It may not be used to avoid any federal tax penalties. Please consult legal or tax professionals for specific information regarding your situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.