People always are asking how often they should update or change their Estate Plans or Wills or Trusts or other areas where they manage their future. Since I like to keep things simple, let me answer this without a lot of long winded answers…
If your life changes, your plans need to change…that’s it!
The biggest question is “what changed” and “what is the impact” of this change in your life. The bigger the change the more important the change needs to be and the more frequent. In addition, if it is going to impact others in your life, then that’s a good time to change something as well.
For example, if you have a major life change, such as a new addition to your family or someone leaving your family for some reason you probably need to make a change much more quickly than if you simply acquired another minor asset. Along the same line, if you have acquired a major asset or disposed of a major asset it’s time to do an update…and sooner than later.
There are also changes that aren’t a result of your life…such as tax changes the government imposes on you or our family. While these are out of your control, they still need to be dealt with and depending on your situation will determine the sense of urgency. Some changes have certain deadlines and these need to be met or you might miss an opportunity or be penalized.
For example, if the amount you can gift your family and loved ones changes, you might need to adjust what you are giving in any given year to ensure you aren’t going outside of this new level and causing a taxable event to occur. Staying up on these types of changes may require an update to your plans.
Then there are the regular changes you make just as part of life happening. These can be large or small and may or may not have much effect on your plans. These are potentially items that can wait for one big update rather than a bunch of smaller updates to occur.
For example, if you decide to change your Power of Attorney or Health Care Directive, these are pretty big changes and should be done immediately.
So take a look at your life…what is happening and what is changing. Let common sense be a good directive for you on the sense of urgency and the frequency. When in doubt, feel free to give me a call and I will be happy to give you some guidance on both areas so you can know the best direction to take and when…it will give you much more peace of mind when you know the impact.