A few months ago, I was speaking with people at a local senior health fair when an older gentleman walked by our booth and said, somewhat dismissively:
“We don’t need to stop. We handled all that years ago.”
“That’s great,” I said. “Do you mind if I ask how many years ago?”
“My kids were still kids.”
“How old are they now?”
“Late twenties.” Then he added, “They get everything and will take care of things when we’re gone.”
I smiled and said, “Well, if you created the plan when they were kids, they’re probably not the people who will be managing everything.”
He stopped. Thought about it for a moment. Then turned to his wife.
“I think you’re right.”
His wife thought for a second and said, “I think we named your brother.” (As the person who would step in to manage things if something happened to both of us.)
Then she looked at me and asked: “Is that bad?”
“Not if that’s what you still want.”
And that’s really the point.
The one thing I’ve learned from reviewing estate plans is that having documents and understanding them are not always the same thing.
The False Sense of Security
Many people believe estate planning is a one-time event.
You sign the documents.
Put them in a safe place.
Check the box.
Move on with life.
The problem is that life doesn’t stop changing. In fact, many of the issues we uncover during reviews aren’t caused by bad planning. They’re caused by good plans that simply haven’t kept up with life.
Children grow up.
Grandchildren arrive.
People retire.
Relationships evolve.
Assets change.
People pass away.
The law changes.
And what felt like the perfect plan ten or fifteen years ago may not reflect the family sitting around your dinner table today.
That’s not because anyone did anything wrong. It’s because none of us have a crystal ball.
We can’t predict future relationships, future wealth, future health issues, or future family dynamics.
The goal of estate planning is not to predict the future perfectly. The goal is to make sure your plan continues to fit the reality of today.
7 Times You Should Review Your Estate Plan
1. It’s Been More Than Three to Five Years
Even if nothing major has changed, the simple passage of time can create blind spots. Many people are surprised to discover they no longer remember exactly how their plan works or who they’ve named to serve in important roles.
We generally recommend reviewing your estate plan every three to five years. Many of our clients choose to meet with us annually because yearly reviews are included as part of the planning relationship.
Sometimes no changes are needed at all. In fact, some of the best reviews end with a simple conclusion: “Everything still looks good.” That peace of mind is valuable, too.
2. You Got Married or Divorced
Marriage and divorce often affect far more than beneficiaries.
You may want to reconsider who should inherit assets, who should make financial decisions, who should make healthcare decisions, and who should serve in positions of responsibility.
A plan that made perfect sense before a marriage or divorce may need attention afterward.
3. There Has Been a Death in the Family
The death of a spouse, child, parent, sibling, trustee, agent, or beneficiary can have a significant impact on your plan.
Sometimes families assume they know what will happen if a beneficiary dies before them, only to discover the documents say something very different than they expected.
A review helps ensure that important decisions remain your decisions.
4. Your Family Grew
The birth of a child or grandchild is one of life’s greatest joys.
It’s also a good reason to review your plan.
One of the surprises we often see during reviews is that parents never realized they had options regarding how and when children or grandchildren would inherit assets.
Many assumed those decisions had already been made exactly the way they wanted.
Sometimes they have.
Sometimes they haven’t.
5. Your Financial Situation Changed Significantly
Retirement.
An inheritance.
The sale of a business.
The purchase or sale of real estate.
Major financial changes are a good opportunity to make sure your assets and your estate plan are still working together.
After all, a Trust can only control assets that are actually coordinated with the Trust.
6. The People You Chose May No Longer Be the Right People
This is one of the most overlooked reasons to review an estate plan.
The trustee who seemed like the obvious choice fifteen years ago may now be dealing with health issues.
A trusted family member may have moved across the country.
Relationships may have changed.
I’ve even reviewed plans where former sons-in-law or daughters-in-law were still named in important roles years after a divorce.
The issue isn’t that the original decision was wrong. The issue is that life continued moving forward.
7. The Law Changed
Estate planning laws change over time. Sometimes those changes are minor. Sometimes they are significant.
We still review plans that contain strategies based on laws that looked very different when those documents were drafted.
Periodic reviews help ensure your plan continues to accomplish what it was designed to accomplish.
When legal changes may affect our clients’ plans, we make every effort to keep them informed.
What Happens If You Never Review Your Plan?
Sometimes nothing. But sometimes families discover problems at exactly the wrong time.
They assume assets are connected to the Trust when they are not.
They assume beneficiary designations say one thing when they actually say something else.
They assume the people named in the plan are still the people they would choose today.
In each case, the issue isn’t that they lacked documents. The issue is that they didn’t fully understand what those documents would do.
That’s what creates a false sense of security. Unfortunately, these surprises are usually discovered during a crisis, when a loved one is already dealing with illness, incapacity, or loss.
The Good News
Most estate plan reviews are surprisingly reassuring. Sometimes a review confirms that your plan is still working exactly as intended and you have a renewed peace of mind. Other times, it identifies areas that deserve attention before they become problems.
The purpose of a review is not to find mistakes. The purpose is to make sure the plan still reflects your wishes.
Sometimes that means updating documents. Sometimes it means updating titles on assets or beneficiary designations.
Estate planning isn’t really about documents. It’s about making sure the plan still matches the people, relationships, and priorities that matter most today.
The challenge is that it’s difficult to know whether your plan still works the way you think it does without taking the time to review it.
Ready for an Estate Plan Checkup?
Before reviewing any estate plan, it’s important to understand what your documents actually do, how your assets fit into the plan, and what questions you should be asking.
That’s why we encourage families to start with education.
Our Free Estate Planning Class explains Wills, Trusts, incapacity planning, probate avoidance, and many of the common misconceptions we see when reviewing estate plans.
Whether your plan was created recently or years ago, understanding how it works is often the first step toward making sure it still fits your family today.
