When you completed your estate plan, you made important decisions about your family, your assets, and the people you trusted to make decisions if something happened to you. You signed your documents, organized everything, and probably felt relieved to have it taken care of.
But that estate plan was created around your life as it existed at the time. Since then, you may have purchased property, opened new financial accounts, welcomed grandchildren, experienced changes in your relationships, or watched your children become adults with families and responsibilities of their own.
Your original estate plan may still be legally valid. The question is whether it still accomplishes what you intended.
When clients ask me when to review their estate plan, I generally recommend a review at least every three years, and sooner whenever there are significant changes in their lives. That doesn’t mean every review will require new documents. Sometimes everything is still appropriate. Other times, we discover something that deserves attention before it becomes a problem for the family.
When to Review Your Estate Plan After Life Changes
Most people recognize that major events such as marriage, divorce, the birth of a child, or the death of a loved one should prompt a review of their estate plan. Those are important changes, and some may have legal consequences that need to be addressed promptly.
But not every reason to revisit your planning involves a major event.
Perhaps you named your brother as successor trustee ten years ago because he was organized, financially responsible, and lived nearby. Today, he lives across the country, has health concerns of his own, or simply has more responsibilities than he did when you chose him. He may still be the person you trust most, but that doesn’t necessarily mean he is the best person to manage your affairs.
Or maybe you created your trust when your children were young and included provisions requiring their inheritances to be distributed at certain ages. Now those children are adults. One owns a business, another has children, and another may be facing financial or personal challenges you never anticipated.
Your goals may still be the same, but the way you accomplish them may need to change.
For example, many parents initially focus on making sure their children don’t receive a large inheritance before they are mature enough to manage it. Years later, the conversation may be less about age and more about protecting an inheritance from potential creditors, divorce, lawsuits, or other financial risks.
I discussed some of these considerations in my article, Should You Leave an Inheritance in Trust for Adult Children?.
The point is that estate planning decisions should reflect the people in your life today, not simply the circumstances that existed when you first signed your documents.
Your Estate Plan May Be Current, but Your Assets May Not Be
One of the most common problems I encounter when reviewing an existing estate plan has nothing to do with how the trust was drafted. It has to do with what happened to the client’s assets afterward.
You may have created a properly drafted revocable living trust, transferred your home into it, and coordinated your financial accounts when the plan was originally completed. But what happened to the assets you acquired later?
Perhaps you sold your home and purchased another property. You refinanced your mortgage, opened a new investment account, inherited property from a parent, or changed financial institutions. Each of those transactions may affect how your assets are owned and whether they are properly coordinated with your trust.
Creating a trust does not automatically place every asset you acquire into that trust. If an asset is not properly titled or otherwise coordinated with your estate plan, it may not pass the way you intended and could potentially require probate or other legal proceedings.
Beneficiary designations deserve particular attention.
Suppose your trust provides that your estate will be divided equally between your two children. Years later, you open a substantial investment account and name only one child as the beneficiary, perhaps because that child is helping you manage your finances.
Depending on the type of account and the beneficiary designation, those funds may pass directly to that child rather than being divided under your trust. The result could be very different from what you intended.
Life insurance policies, retirement accounts, and other assets with beneficiary designations require their own consideration. They should not all be handled the same way, and naming your trust as beneficiary is not automatically the correct choice.
I’ve discussed this issue in more detail in Life Insurance Beneficiary Review: Does Your Policy Still Match Your Estate Plan?.
During an estate plan review, I want to know what you own today, how those assets are titled, and whether the beneficiary designations still support your overall planning. Reviewing the documents without reviewing the assets can leave significant issues undiscovered.
Are the People Named in Your Estate Plan Still the Right Choices?
Another area that deserves attention is the people you appointed to act on your behalf.
When you created your estate plan, you likely selected a successor trustee, an executor, an agent under your financial power of attorney, and someone to make healthcare decisions if you become unable to make them yourself.
Those choices may have made perfect sense at the time. But people change, relationships change, and responsibilities change.
Someone who was willing and able to serve ten years ago may no longer be in a position to take on that responsibility. A close friend may have moved away. A sibling may be dealing with health concerns. An adult child who was too young or inexperienced to serve when you created your plan may now be an excellent choice.
It is also worth considering whether the people you selected understand what you have asked them to do.
Being named as successor trustee, for example, can involve managing substantial financial assets, dealing with financial institutions, maintaining records, and ultimately administering and distributing trust property. That is a significant responsibility, particularly when family relationships are complicated.
The same applies to someone holding your financial power of attorney or healthcare directive. You want people who understand your wishes, are comfortable making difficult decisions, and are capable of acting when needed.
A review gives us an opportunity to revisit those appointments and determine whether they still make sense.
Changes in Your Financial Circumstances May Require More Planning
Sometimes your family circumstances have remained relatively stable, but your financial life has changed considerably.
Perhaps you have accumulated more wealth than you expected, purchased investment property, started a business, received an inheritance, or begun preparing for retirement.
Those developments may introduce planning considerations that were not particularly relevant when your estate plan was created.
For example, someone who originally created a trust primarily to avoid probate may now have assets that warrant additional consideration of estate taxes, income taxes, asset protection, or how wealth will pass to future generations.
Business ownership introduces its own issues. If you own an LLC, corporation, or partnership, your estate plan should be coordinated with the governing documents, ownership arrangements, and any applicable succession or buy-sell provisions. I addressed some of these concerns in Has Your Business Outgrown Its Legal Documents?.
Changes in the law can also affect your planning, even when your personal circumstances have not changed. Tax laws, property tax rules, and other legal developments may create opportunities or concerns that did not exist when your documents were drafted.
Not every legal change will affect every estate plan. The purpose of a review is to determine which developments actually matter to your circumstances rather than making changes based on headlines or assumptions.
Reviewing Your Estate Plan Doesn’t Mean Starting Over
I think one of the reasons people postpone reviewing their estate plans is that they assume the process will require them to redo everything.
That is not necessarily the case.
Sometimes a review confirms that the existing documents are appropriate and no significant changes are needed. Perhaps we identify an account that needs to be retitled, a beneficiary designation that should be corrected, or information that needs to be updated in your asset inventory.
Other times, we may recommend amending or restating a trust, updating powers of attorney and healthcare directives, or making more substantial changes because your family circumstances or planning goals have evolved.
The appropriate recommendation depends on what we find.
I also encourage clients not to make changes to beneficiary designations, property titles, or trust provisions without understanding how those changes affect the rest of their estate plan. Something that seems straightforward can have unintended legal or tax consequences.
A proper review considers the entire picture. We look at your documents, your assets, the people involved, and what you want your planning to accomplish.
How Often Should You Review Your Estate Plan?
At Cheever Law, I recommend reviewing your estate plan at least every three years, even when you haven’t experienced a significant life event. For clients participating in our ongoing planning program, reviews take place annually.
Three years may not seem like much time, but consider how much can change during that period. You may have purchased or sold property, changed financial institutions, accumulated additional assets, or experienced important changes in your family.
Between scheduled reviews, I encourage clients to contact my office when significant changes occur rather than waiting until their next appointment.
You don’t need to know whether a particular event requires an amendment or an entirely new plan. That’s part of what we evaluate together.
Before a review, it is helpful to gather current information about your assets, beneficiary designations, and any changes in your family or financial circumstances. You should also think about whether the people you named in your documents are still the people you would choose today.
You may discover that your estate plan is still doing exactly what you want it to do. If so, that’s valuable information. If something needs attention, it is much better to identify and address it while you are available to make those decisions yourself.
Your Estate Plan Should Continue to Work for Your Family
When I help clients create an estate plan, my goal is not simply to prepare documents that are legally valid on the day they are signed. I want those documents, along with the financial and practical arrangements supporting them, to accomplish what the client intended when they are eventually needed.
That requires more than putting a trust in a binder and assuming everything is taken care of forever.
Your family will continue to change. Your assets will change. The law will change. And your own priorities may evolve as you move through different stages of life.
A thoughtful estate plan should be able to evolve with you.
If it has been more than three years since your estate plan was reviewed, or your circumstances have changed significantly since you signed your documents, it may be time to revisit your planning.
At Cheever Law, we help California individuals and families evaluate their existing estate plans, identify potential gaps, and determine whether updates are necessary. If you’re ready to take another look at your plan, contact our office or schedule a 15-minute introductory call. We can discuss your circumstances and the appropriate next steps.