Many of my clients often ask me, “when and how often should I update my Will and other Estate Planning documents?”
We have seen a lot during these past couple of years, and through this pandemic. One thing many of us have learned is the importance of having an estate plan and your financial affairs in order. One never knows when a medical crisis may strike, causing incapacity, disability, or even sudden death.
What circumstances should you be considering that may warrant a change in your planning?
Change in Family Structure
The birth of a new child, grandchild, or adoption of a child. Deciding who will be the guardian of your minor child in the event something happens to you, is crucial. Whether it’s for your first child or other children, you need to make sure the person you decide upon is stated in a legal document. If years have gone by since your planning was done, are you still sure you want the person whom you selected to be guardian of your children, and are they still willing and able to serve in that role? Sometimes, as years go by, relationships change, people get older, and you may no longer want the person you chose to serve in the role of guardian for your minor child.
Perhaps you, or someone in your family may be considering divorce, or is now divorced. There are laws the govern what happens to an estate plan in the event of a divorce. Divorce can terminate a spouse’s rights and claims to an estate, but not always. Divorce is difficult. But, as difficult as it may be, if your plan is not changed, preferably prior to the divorce, and something happened to you, your wishes may not be honored. Your family could end up in costly litigation for years before there is a resolution. Also, if your spouse, child, or other family member has been appointed to serve in any medical or financial capacity, you want to make sure they are removed.
Change in the Law
Periodically, the laws do change. When new laws are enacted that affect current trust and estate laws, or tax laws, those changes may be significant enough to warrant an update to your existing estate planning documents. While some changes in the laws may not apply to your particular situation, the best way to find out is to review your documents with your estate planning attorney. Depending on the situation, a minor amendment to your plan can provide asset protection, save you and your family money in administrative fees, taxes, or potential long-term-care cost.
Change in family circumstance
Sometimes there are changes in circumstances with respect to a family member. Perhaps they are getting older and are looking to proactively plan for long-term-care cost and would like to sometime in the future have the option of qualifying for Medicaid.
Maybe there is someone in your family who has special needs. If so, there are specific trusts designed just for a person with special needs that should be part of your plan. Whether the person is born with a disability, or the disability surfaces later in life, you need to make sure to review your estate plan so you are not compromising their eligibility for crucial government benefits they may receive. Drug, alcohol, gambling or other addictions, and even mental health challenges, require special attention in an estate plan. Continual monitoring in these situations can ensure that your estate plan will meet your goals and wishes.
Changes for Your Appointees
If you want your plan to survive after you are no longer here, you need to make sure there is always someone available to serve. I’m a strong proponent of appointing successors who can serve in the event the first person you appointed is unable or unwilling to serve for any reason. There may be a change in your relationship, there may be an illness or loss of capacity, or they may have moved far away. If there is no one left to step in, or if you changed your mind about whom you wish to serve, it is time to update your plan.
Although, there are many more reasons to review your estate plan, putting your documents away and forgetting about them is not the best approach. We recommend reviewing your documents every three to five years, and certainly sooner if there is a life changing event. If you have experienced a change in circumstances or if it has been a while since you updated your plan, call today 718-514-7575 to make sure your wishes are honored and the people you choose are appointed with the proper legal documentation.