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How often should you update your estate plan?

Remember how excited you were when you finally got your California estate plan created and established? You likely felt as if a giant burden had fallen off your shoulders. You knew you had perfectly set up your will, trusts, powers of attorney and all your other legal documents so as to ensure protection of yourself and your family, both now and in the future, to the greatest extent possible.

Unfortunately, even the best estate plan needs occasional updating. As Fidelity explains, experts recommend that you review your estate plan at least every three to five years. Why? Because people and their lives inevitably change over time.

Life changes

For instance, have you or one of your adult children married or divorced since you created your estate plan? Have new members joined your family or extended family through birth or adoption? Have any of your beneficiaries died? All of these constitute life changes that could impact your estate plan. Others include the following:

  • Your retirement or that of one of your beneficiaries
  • A catastrophic injury, illness or disability of yourself, your spouse or a family member
  • The 21st birthday of a child or grandchild
  • Your acquisition of a new home or other high-value asset
  • The major expansion of your business
  • The death or major change in circumstances of your executor, one of your trustees or attorneys-in-fact, or the person(s) you designated as your children’s guardian(s) in the event of your death before their respective ages of majority

Financial changes

In addition to life changes, you and/or one or more of your beneficiaries may sustain a major financial change for better or worse. Events such as the following represent excellent times to review and possibly update your estate plan:

  • Someone receives a major inheritance
  • Someone receives a major lawsuit settlement or jury award
  • Someone takes out a major loan or otherwise assumes a major financial burden
  • Someone benefits from an investment in a major way or suffers a major loss

In addition, tax laws change constantly. Some of these changes, such as the estate and gift tax changes encompassed by the Tax Cuts and Jobs Act of 2017, affect not only your current estate plan itself, but also the way in which you and/or your beneficiaries report your taxes.

All in all, regularly reviewing your estate plan just makes good sense. You want to ensure that all of your legal documents continue to work together to achieve your goals. While this educational information is not legal advice, it can help you understand the importance of regularly updating your estate plan and some of the times you may wish to do so.

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