Why You Should Review Your Estate Plan Regularly

Once you create an estate plan, it’s important that you don’t put it away in a drawer and forget about it. You should review your documents at regular intervals, or when any major changes occur in your life — such as marriage, divorce, or an increase in wealth. By updating your estate plan when necessary, you can have the peace of mind knowing it reflects your current wishes and helps prevent family conflicts. A knowledgeable estate planning attorney can guide you through the process of making any changes to ensure your documents are legally valid and enforceable. 

Here are five reasons you should review your estate plan regularly: 

1. The Unexpected Can Happen at Any Time

The unexpected can happen at any time. In the event of an accident or serious illness that leaves you incapacitated, it’s essential to ensure you have the necessary documents in place to remain in control over your healthcare and finances. Without ensuring your documents are up to date, your wishes may not be met. 

Review your powers of attorney, HIPAA authorizations, and advance directives every few years or after a major event such as a marriage, divorce, or medical diagnosis. While you can update your incapacity plan at any time while you are of sound mind, it’s vital to ensure they are executed correctly. Destroy the old documents and provide copies of the new documents to your health care agent and financial power of attorney to prevent confusion. It’s also a good idea to keep a list of your current doctors, any medications you are taking, and your insurance information. 

2. Life Changes Occur

There are many changes that can occur during the course of your life. A new child or grandchild, marriage, divorce, and death of a loved one are just a few examples of events that should prompt you to review your estate plan. You might also update it if you learn that one of your children or grandchildren has a disability that will require lifelong care, and you would like to provide for them through a special needs trust. Other life changes that may impact your estate plan can include starting or selling a business, acquiring real estate, moving to a new state, and retirement. 

3. You Can Avoid Unintended Consequences if You Divorce

Failing to update your estate plan can result in unintended consequences if you part ways with your spouse. If you divorce and do not change certain beneficiary designations, your ex-spouse could potentially inherit those assets. Review any beneficiary designations with the relevant financial institutions from time to time to prevent unintended asset distribution when you pass away. 

Michigan law offers a safety net and automatically revokes any disposition of property to an ex-spouse in a “governing instrument,” such as a will. However, you might wish to leave your ex-spouse a portion of your assets if you have a positive post-divorce relationship and still consider them a family member. You might also want to leave property to someone other than who would inherit it in accordance with intestate law if you do not change your will after divorce. Updating your estate plan can ensure your assets are distributed to your intended beneficiaries. 

4. You Can Help Ensure Your Legacy is Preserved

When you review your estate plan periodically to ensure it is up to date, you can protect your assets from potential creditor claims and safeguard your wealth for future generations. Importantly, you can make adjustments to your asset protection strategy as needed in response to any changes in your financial situation. While your assets and portfolios may fluctuate, regular reviews of your estate plan can ensure your current strategy is still the best one. 

5. Tax Laws Can Change

An outdated estate plan can have serious tax implications. While the tax laws are complex and constantly evolving, what was once an ideal estate plan may no longer be in light of new legislation. If your estate plan doesn’t reflect crucial changes in the tax laws, you could miss out on critical tax benefits and subject your beneficiaries to a significant tax bill. This can mean your heirs would receive less of the inheritance you wished to leave them and have more difficulty preserving generational wealth. 

Contact an Experienced Michigan Estate Planning Attorney

It’s important to set aside time to review your estate plan at regular intervals to ensure your plan meets your objectives. A skillful attorney can best advise you on how to navigate any changes in your family circumstances, financial situation, and the legislative landscape. To learn more about our estate planning services, contact us today. Our team of attorneys is committed to guiding individuals and families through the estate planning process and providing the ongoing assistance they need.