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Question:

How often should I review my estate plan?

Response:

It depends how old you are. Most people don’t do any estate planning until they have children. That’s when they begin to have responsibility for someone other then themselves and it also may well coincide with when they begin to have some savings or equity in a home. Given that the vast majority of young adults are healthy and stay healthy, this works out most of the time.

Typically once new parents create their estate plan, they leave it alone until they approach retirement. Again, this usually works out fine even if that old estate plan becomes woefully out-of-date as the children grow up and the parents accumulate assets. But there are many situations where the old estate plan is no longer adequate or could in fact cause harm. One approach would be to review the plan every 10 years to make sure that it is up-to-date and still serves your needs. Another is to review it whenever a triggering event occurs. Such triggering events would include:

• Marriage or committed relationship. Especially a second marriage or committed relationship since you’re likely to have more assets at this point and life may be a bit more complicated.
• Divorce or separation.
• Special needs. Learning that a child or grandchild has special needs.
• Risky heirs. If you realize a child or grandchild takes drugs, spends money foolishly, or is in a rocky relationship or marriage, you may well want your estate plan to include some guardrails that otherwise may not be necessary. This is also true if you know that an heir has been sued or is likely to be sued for any reason.
• Disability. Whether it’s your own disability or that of a family member, it could mean a revision in your estate plan is in order.
• Death. The death of a beneficiary could well mean that you need to revise your plan.
• Birth. While your estate plan should take into account the potential arrival of children or grandchildren, it may not, or may not do so in a way that you would now want.

All these are triggers to review your existing estate plan, or to create one if you don’t already have one. But life is busy and many of us put off estate planning as something we’ll get to when we’ve taken care of our more immediate concerns, which then may never happen. So, the 10-year rule is also a good one, at least until age 65. Then I would recommend reviewing your plan every five years. This is for two reasons: First, when we reach “retirement age,” a lot begins to happen. We may actually retire. We may move. And we may begin to suffer from the ills of aging, whether physical or cognitive. We need to review our estate plan more often. Second, death and disability are closer. While we don’t know when either may occur, they’re much more likely to happen when our current estate planning documents are in place than was the case when we were younger. For that reason, such documents are much more likely to matter and it’s much more important that they be up-to-date and say what we want.

Finally, let me say a few words about those of us who don’t follow the path of first, marriage, and then, children. While such events may well be a catalyst for doing estate planning, fewer adults are getting married or having children. In many ways it’s even more important for single individuals to do their planning since they are less likely to have “natural” people in place to step in if necessary. Do you really want your estate to go to your parents or siblings? Do you want them making financial and medical decisions for you if you become incapacitated? If you’re an unmarried adult without an estate plan, now’s the time to do your planning.

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