As I often mention during the meeting when clients sign their estate plan documents, that an estate plan is “not designed to be set in stone forever.” For the most part, estate plans and their respective documents are designed to evolve as the individual’s life changes. Without the ability to amend or revise the documents, and as the years pass by, an estate plan becomes outdated and practically useless.
Oftentimes an outdated estate plan causes logistical problems for those individuals in areas of responsibility as they attempt to unravel what should occur. Unfortunately, it also leads to the estate ending up in the probate court system. Outdated documents cause confusion. When confusion happens, disputes inevitably occur. Disputes often lead to the accrual of thousands of dollars in legal fees, costs, and expenses. What should have been a simple process has now become complicated, time consuming, subject to delay, and expensive.
In order to avoid any issue and the resulting confusion that can occur, regular review and updating of an estate plan is essential. In order to assist in the process, below are the following suggestions.
Revise Your Estate Plan After Significant Life Events
Review your estate plan each time a major life event occurs. Major life events have the ability to quickly make an estate plan obsolete. These major life events include the following examples:
- Addition of new beneficiaries. This may include the birth of a child, grandchild, or when an adoption occurs. Updating your estate plan to list each beneficiary helps avoid any confusion or dispute from occurring.
- Death of individuals. Often mentioned in estate plans are individuals who are either beneficiaries or fiduciaries with responsibilities to carry out. If one of these individuals has passed away, an estate plan should be modified to replace him or her with a living individual.
- Divorce. Oftentimes, estate plans will list a married couple as holding joint responsibility. This often is seen while addressing guardians of minor children. If a divorce of a couple occurs, revisions would be needed to specify which of the individuals should have this responsibility or another individual/couple should be named.
- Children becoming adults. Often an estate plan should evolve to take into consideration children who are now adults and should be given greater responsibility.
- Change of Address: Often a change of address that accompanies a move, necessitates the updating of estate plan documents to include the current address, but also to reflect the purchase of another property that should also be addressed in the estate plan.
When these events occur, it should trigger a red flag that a review and potential revisions of an estate plan are needed.
Review Your Estate Plan Regularly
Even when a major life event has not occurred, we recommend that a review of an estate plan occur at least once a year. That way, an individual will be able to locate and revise minor changes that have the ability to significantly impact their estate plan. For example, in a review of the documents one might discover that the address or telephone number of individuals in areas of responsibility has changed. This contact information is very important to have up to date in the Powers of Attorney because if an emergency situation has occurred, the first course of action will be to attempt to contact this individual by telephone.
In order to facilitate this once-a-year review, we recommend picking a date that is easier to remember as “review the estate plan” day. For example, some clients pick a non-major holiday or date (such as, St. Patrick’s Day, April Fool’s Day, or Flag Day) to help them to remember to review their estate plan documents.
Whether a major or minor change to an estate plan is needed, the amendment process is typically far simpler than originally establishing the estate plan. For our clients, they often contact the firm by e-mail or telephone, we work through the revisions that need to occur in this manner. Clients only come to the office once to sign the documents. Most revisions are then placed with the current estate plan or replace the out-of-date documents.
The only constant in life is change. Make certain that your estate plan evolves as your life does.
© 2022 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
