There are probably two times when people consider their estate planning documents. The first of these times is when you draw up the documents. The second time is likely when you need them.
Unfortunately, that could be a problem. There are a variety of reasons why you should review these documents every three-to-five years.
Here are some of the reasons why that review may be important.
Family changes: New children, grandchildren or great-grandchildren could be a reason for changing your documents. Maybe your children have become of age and you want to revise the nominations for personal representatives, successor trustees or agents under your power of attorney and healthcare documents. Maybe you nominated a brother or sister and they are getting older and less capable of accepting the responsibilities imposed by the job. Finally, if a family member named in your legal documents precedes you in death, you will have to update your plans. Of course, if you have been divorced, or divorced and remarried you may need to change your documents to protect your assets from an ex-spouse or to identify someone new as your medical or legal surrogate.
Tax changes: If your documents were created before 2005 and never updated, changes in the estate-tax exemption may make your documents overly complicated and possibly result in your property not descending that way you anticipate. Back in the 1990s, the estate tax exemption was $600,000. That means that anyone with an estate worth $600,000 or more would have an estate subject to estate taxes. That has changed, and now, in 2019, the estate tax exclusion is $11.4 million per individual and $22.8 million per married couple. You should have your documents reviewed and updated to reflect the new estate tax rules.
If you have moved from one state to another since you developed your estate planning documents, it is very important that you have them reviewed in your new state. What may have applied in North Carolina or Ohio may not work well in Florida. And whether you have moved or not, it’s worth having your documents reviewed in case there have been changes in the law.
So, as a rule, you should consider having your documents reviewed every three-to-five years by a qualified estate planning attorney. It’s possible nothing needs to change. But it’s better to be safe.