The only constant thing in life is change, and you need to prepare for that fact. One way to prepare is to have an estate plan. This plan gives you peace of mind, knowing your wishes will be followed, no matter what life brings.
However, creating an estate plan isn’t a one-and-done task. It needs to be checked regularly to stay effective and up-to-date, but why? Here’s why reviewing your estate plan every so often is so important.
Life changes demand estate plan updates
Major events like marriage, divorce, the birth of a child or the death of a beneficiary can greatly affect the distribution of your assets. For example, if you get married, you probably want to include your spouse in your will or trust. Regularly reviewing your plan ensures it accurately reflects your current family situation and what you want for the future.
Legal and tax laws evolve
The legal landscape is always shifting. What was optimal for your estate plan a few years ago might not be the best strategy today. For example, federal or California tax laws changes could affect how your assets are taxed when passed down.
Regularly reviewing your estate plan lets you use new legal strategies that might benefit your loved ones or help lower estate taxes. Staying informed and adjusting your plan could save your family a lot of money in taxes and legal fees.
Your financial situation may change
Your finances today might look very different from when you first created your estate plan. Maybe you’ve gained new assets, started a business or received an inheritance. On the flip side, you may have sold major assets or taken on significant debt. These financial changes can have a huge impact on your estate planning.
Regular reviews of your estate plan can help you meet your financial situation and goals even with these changes. This might mean updating your beneficiary designations or revising your plans for charitable giving.
There’s no legal requirement in California to review your estate plan at specific times. However, it could be a good idea to do so every three to five years or after any major life event. Keeping your estate plan current isn’t just about protecting your assets—it’s about protecting your legacy and your family’s future.