The 4 D’s of Reviewing Your Estate Plan

Your plan is draft, signed, in place, and valid. Now how often should you review your plan to determine whether it needs to be updated? There’s no “right answer” – but generally every 2-3 years you should review your planning provisions to make sure they still effectuate your wishes. When self-reviewing, you should keep the following items in mind, which may be a good reason to update your plan:

Divorce

If you have divorced your spouse since the creation of your estate plan, or have separated but not divorced, you need to update your estate plan across the board. Most people name their spouse as their primary fiduciary and beneficiary for all roles and assets. Divorce itself only removes your ex-spouse for purposes of inheriting under your will, but it does not remove them from your beneficiary designations, your financial power of attorney, your health care power of attorney, or your trust. Failing to update your plan after a divorce or separation could end up seriously undermining your succession plans if something happens to you.

Death

The death of someone named in your plan does not necessarily mean the plan needs to be updated, just by itself. If you’ve got sufficient alternates named in your plan, and the resulting plan without that person does not change your intentions, then your plan may still be in good shape. But, in reviewing your estate plan, you should keep in mind how a deceased loved one will or will not change the way your plan works. If the deceased loved one was the primary fiduciary and/or beneficiary in your plan, it may be worth updating to realign your priorities.

Disability

Much like death, the disability of a named individual in your plan can warrant an estate plan update. In reviewing your estate plan, keep in mind whether the person named as an alternate fiduciary can and will serve in the absence of the disabled individual. If they can’t, of if the disability of the named individual significantly changes your intentions, then it’s likely worth updating your plan to remove the disabled individual and replace them with someone else who would be good for the role.

Decisions (Change in Intentions)

If you simply changed your mind since the time the estate plan was put into place, or while reviewing your estate plan it becomes abundantly clear that it has not aged well, the best course of action is to make the necessary updates to get your plan to where it needs to be.

A common theme here is that you should always keep your plan and your intentions top-of-mind in the event of something significant happening in your life, but just time itself may not mean the plan needs to be updated. Keep the above points in mind when reviewing your estate plan periodically.