A client’s family member recently passed away with a properly executed estate plan, including all the bells and whistles. There was, however, one small problem: the plan’s distribution scheme was never amended to account for changes in his financial situation. What seemed like a minor oversight had heartbreaking consequences for his would-be beneficiaries.
Although it is absolutely true that a proper estate plan can ensure your property will be managed and distributed according to your desires, it is equally as true that an outdated plan can have unintended and potentially devastating ramifications.
As a general rule of thumb, you should review your estate plan every 3 to 5 years to account for life’s many changes. Examples of such changes include the following:
Family. Changes in your family dynamic–including marriages, divorces, deaths, births, and special needs children–are the most common events requiring modifications to your estate plan. Remember that these life-changing events happen not only to you and your children but also to your grandchildren and other intended beneficiaries.
Guardianship and Trustees. A proper estate plan designates individuals to act as guardians for minor children and as successor trustees to manage, invest, and distribute your assets once you pass away. Wisdom dictates that you periodically reflect on whether your designated guardians and successor trustees are still capable of serving in these important capacities.
Assets and Distribution Schemes. A good estate plan includes a distribution scheme that specifies precisely when and how your assets will be distributed to your intended beneficiaries. Unaccounted-for changes in your financial situation or beneficiary designation can unravel even the most carefully crafted plans.
If you haven’t recently reviewed your estate plan to account for life’s changes or to determine if it still reflects your wishes, I encourage you to do so now. Then seek assistance from an experienced attorney if you believe modifications may be necessary or desirable.