Estate Plan Checkup: Why Maintenance Matters

Creating an estate plan is an important milestone. It brings peace of mind, protects your family, and ensures your wishes are honored. But an estate plan is not a “set it and forget it” document. Life changes, laws change, and even your assets change over time. Without regular reviews and updates, the best-laid plan can quickly become outdated, leading to confusion, unintended consequences, and sometimes costly mistakes.

A good rule of thumb is to review your estate plan every three to five years—or sooner if you experience a major life event, such as marriage, divorce, the birth of a child or grandchild, the death of a loved one, a significant change in wealth, or a relocation to another state. These events often alter your goals or the people you want to involve in your plan, and your documents should evolve to reflect that.

Consider the example of the Stein family. They created an estate plan when their children were young, naming close friends as guardians and one of the parents’ siblings as trustee. Two decades later, the children were grown, the guardians had moved across the country, and one sibling was no longer in a position to handle financial matters. When the father passed away unexpectedly, the outdated plan created unnecessary complications, and the family had to go to court to address issues that could have been easily avoided with a simple update.

Regular reviews also help ensure your plan aligns with current laws. Tax laws change frequently and can have a significant impact on your estate. For example, changes to federal estate-tax exemptions, state estate-tax thresholds, or retirement account rules can all affect how your assets are taxed and distributed. By reviewing your plan periodically, you can make adjustments to take advantage of new opportunities or mitigate new risks.

A yearly estate plan checkup doesn’t have to be overwhelming. Here’s a practical checklist to guide your review:

1. Fiduciary Appointments. Are your chosen executors, trustees, powers of attorney, and health care agents still the right people for the job? Circumstances change—relationships evolve, people move, and health issues arise. Make sure the individuals you’ve selected are still willing, able, and trustworthy.

2. Beneficiary Designations. Review the beneficiaries on your retirement accounts, life insurance policies, and annuities. These designations override your will or trust, so they need to be current and consistent with your broader plan. Adding contingent beneficiaries is also wise to ensure a smooth transfer if a primary beneficiary passes away before you.

3. Asset Titling. Check how your accounts and properties are titled. Are joint accounts still appropriate? Is your home properly titled in your trust? Proper titling helps avoid probate and ensures your assets flow to the right people in the right way.

4. Major Life Changes. Have there been marriages, divorces, births, or deaths in your family? Each of these events may warrant updates to your documents to reflect new relationships or responsibilities.

5. Tax and Legal Changes. Have there been significant changes in tax laws or other legal rules that might affect your plan? An attorney can advise you on whether updates are needed to minimize taxes, protect assets, or improve efficiency.

6. Charitable Goals. If you’ve developed new charitable interests or want to adjust your legacy gifts, now is the time to align your documents with those goals.

7. Digital Assets. Digital assets—like email accounts, social media, cryptocurrency, or cloud storage—increasingly play a role in our lives. Ensure your plan includes clear instructions for accessing and managing these assets.

Even if you don’t have any major changes to make, a regular review provides reassurance that your plan is up to date and will work the way you intend when it’s needed most. It also gives you an opportunity to discuss your plan with your loved ones, ensuring that they understand your wishes and know where to find important documents and information.

Failing to maintain your plan, on the other hand, can lead to unintended consequences. Outdated fiduciary appointments can result in someone you no longer trust being in charge of your affairs. Mismatched beneficiary designations can direct assets away from your intended heirs. And outdated tax planning can leave your estate vulnerable to unnecessary taxes and fees.

A checkup with your estate-planning attorney is one of the simplest ways to keep your plan in good shape. During this review, your attorney can help you identify gaps, suggest updates, and explain how changes in the law may affect your plan. This proactive approach can save your family significant time, money, and stress down the road.

Think of your estate plan as a living framework that grows and adapts with you. Just as you schedule regular checkups with your doctor to maintain your health, scheduling regular reviews of your estate plan is essential to maintaining its effectiveness.

To learn how to protect you and your family, visit HaasZaltz.com, call 516-979-1060, or email [email protected] for a consultation.