How often should I review my will and the rest of my estate plan?
Written by Jim Worthington on September 30, 2018
Clients often ask how frequently they should review their estate planning documents. The answer varies. One should review them after any major events in a family’s life, such as a birth, marriage, change of employment, retirement, divorce, or death.
After the birth of a child, it is very important to nominate a guardian and to set up a trust so the child doesn’t receive an inheritance at age 18 as discussed here. Similarly, many new grandparents want to help with their grandchild’s education and make changes to their estate plan to provide that help.
One’s own re-marriage is an obvious time to look at one’s estate plan. It may also make sense to do so when children or grandchildren marry. In the sad event that a child dies, most wills do not make provisions for his or her spouse. That should be a conscious decision rather than an unexpected default provision.
Changing employment or retirement is a good time to look at one’s own retirement accounts and whether the loss of employer-provided life insurance requires purchasing a policy. A well-designed estate plan includes coordination of the traditional estate planning documents with life insurance, retirement accounts, and their beneficiary designations. And many people use retirement as the occasion to set up a funded revocable trust to provide for disability management and to avoid probate. For more discussion of that, see this article.
On the subject of beneficiary designations, divorce does not automatically revoke those in Kentucky even though it does revoke will provisions. The law is different in other states.
Most wills and trusts are designed so that they are still effective after a beneficiary dies. The oft-used language per stirpesmeans that the share of a pre-deceased person goes to his or her issue. Many people, however, like to have a newer document that doesn’t mention the pre-deceased person or mentions the survivors by name so they know they were intentionally made beneficiaries.
If none of these events have happened in your family’s life and you’ve just experienced the passage of time, there may be less need to review but even that varies. For example, the five years between children or grandchildren growing from three to eight years old is much different than the five years between ages eighteen and twenty-three.
The easiest way to do this is to set up an annual reminder for the month you signed your documents. Or perhaps, your lawyer will do that for you.