An estate plan helps people establish a legacy after they die. Some estate plans consist of just a will. Others may involve multiple different documents that address both the possibility of dying and the potential of an incapacitating medical event like a stroke.
Many people take for granted that they have proper protection once they draft an estate plan. However, estate plans typically require regular reviews and updates to ensure they remain enforceable. Reviewing estate planning paperwork every few years is usually a smart decision.
What do people need to check and potentially update when they’re going over estate planning paperwork?
Beneficiary designations
Personal relationships change subtly over time. What may have once seemed like a reasonable way to divide personal property may seem much different a few years later. Previously healthy relationships can fall apart due to arguments or estrangement. A testator may add new members to their family or may realize that their grandchildren require more support than their children. Looking over the beneficiary designations in an estate plan is often a smart move for those updating their documents.
The assets included
People’s financial circumstances change as rapidly as their interpersonal relationships. After drafting a will, the testator might sell their house or purchase a new vintage vehicle. They might start or sell a small business. Any major changes in personal holdings may require changes to estate planning documents. People may want to transfer assets to a trust or add them to a will. They may also need to remove instructions for assets that they no longer possess.
Documents filed with outside businesses
Most people recognize they should go over each of their estate planning documents occasionally to check them for accuracy and the need for updates. Fewer people think about the secondary documents that may play important roles in their estate plans. For example, perhaps the testator filed transfer-on-death paperwork with their investment brokerage or bank. They may need to check those documents occasionally to ensure that the beneficiary they listed is still the person who should obtain control over those financial resources when they die.
Similarly, life insurance paperwork may require updates. The death of a beneficiary, the birth of new family members, remarriage and divorce are all scenarios that might make updates for life insurance beneficiary designations necessary. People cannot achieve those changes with estate planning documents. They must file new paperwork with the insurance company or financial institution.
Regularly updating estate planning paperwork is as valuable as creating an estate plan initially. Those who occasionally review and modify their documents can feel more confident about achieving their legacy-related goals after they die.
