Creating an estate plan is not the end of the estate planning process. Many workers in the estate planning industry press the importance of keeping an estate plan updated.
This means reviewing the estate plan with some degree of regularity. But why is this necessary in the first place?
Why update your plan?
CNBC discusses the importance of keeping an estate plan updated. First, the estate plan is used as a map for people to know what to do with a decedent’s assets and estate after their death. Needless to say, many things will change throughout a person’s lifetime. This means that what a person once wrote in their estate plan or will may not always hold true.
Areas of change in an estate plan
Some of the biggest areas of change are within the beneficiaries of an estate plan and the assets. Regarding beneficiaries, it is simply natural for people to come and go in the lives of others. Thus, the owner of an estate plan may want to review and update their plan any time there is a loss in the family, an estrangement, or a gain through marriage, birth or so on.
As for assets, people are constantly losing and gaining money throughout their lives. Major changes in assets expected to last for at least several months should probably be noted in a will, however. This includes both net losses like going into debt, or net gains like selling property or coming into an inheritance.
Without reviewing frequently, it is impossible for a person to ensure that their estate plan accurately reflects their life circumstances as they currently stand.