An estate plan is more than just a will—it’s a thoughtfully designed set of legal documents that safeguard your legacy and provide for your loved ones. This includes essential items like advance healthcare directives, powers of attorney, trust documents, and beneficiary designations for your assets.
While creating these documents is a vital first step, keeping them updated is equally important. An outdated estate plan can lead to significant challenges for your family, such as prolonged court battles or assets being distributed in ways that no longer reflect your wishes. Regularly reviewing and updating your estate plan ensures your intentions remain clear, enforceable, and aligned with your current priorities.
Understanding the Basics of Estate Plan Reviews
An estate plan review is a proactive checkup for your legal documents, beneficiary designations, and overall estate strategy, ensuring your plan aligns with your current wishes and remains compliant with ever-changing laws.
Experts generally recommend reviewing your estate plan every three to five years, even if your circumstances haven’t significantly changed. This is because tax laws, family dynamics, and the value of your assets are constantly evolving.
While updating your plan may incur legal fees, these costs typically pale in comparison to the potential financial and emotional strain caused by an outdated plan. Regular reviews give you the opportunity to address gaps or inconsistencies before they lead to larger problems, ensuring your assets are protected and your family’s future remains secure.
Conducting Regular Estate Plan Reviews
Regular reviews help ensure your estate plan remains current and effective. Here’s how to conduct a comprehensive and efficient assessment of your plan:
- Start by reviewing beneficiary designations on all financial accounts, retirement plans, and insurance policies. These designations take precedence over your will, so it’s essential they align with your overall estate planning goals and reflect any recent changes in your circumstances.
- Next, verify the status and capability of your named executors and trustees. Confirm they are still willing and able to fulfill their responsibilities, as life changes—such as health issues or relocations—can affect their ability to serve.
- Inventory your assets and their current values each time you review your estate plan. This inventory should include all major properties, investments, business interests, and valuable personal items. You should also review your insurance policies—particularly life insurance—confirming your coverage amounts are adequate, premiums are up to date, and policies remain active.
- If applicable, update your inventory of digital assets, such as online accounts, cryptocurrencies, and digital files like photos or documents. Make sure this inventory includes access details and clear instructions for your executor regarding how these assets should be managed, transferred, or deleted.
Incorporating these steps into your regular review process will help maintain a robust, up-to-date estate plan that protects your legacy and aligns with your goals.
Life Events That Trigger Immediate Estate Plan Updates
While regular reviews are important, major life events are pivotal moments to revisit and update your estate plan. Family changes, such as marriage, divorce, the birth or adoption of a child, or the death of a beneficiary or executor, often require immediate updates. Adjusting your plan to reflect shifting family dynamics ensures it remains aligned with your wishes and continues to function as intended.
Financial milestones are another significant reason to reassess your estate plan. Events like acquiring or selling property, starting a business, receiving an inheritance, or experiencing a substantial change in your financial landscape can impact tax strategies and asset distribution plans, making timely updates essential for preserving your wealth and intentions.
Geographic changes can also profoundly influence your estate plan’s validity and effectiveness. Relocating to a new state may introduce different probate procedures and tax laws, while owning property in multiple states can complicate matters with multi-state probate requirements.
International moves or acquisitions add another layer of complexity, involving foreign tax laws, property regulations, and international treaties. Addressing these changes with a comprehensive review and potential updates ensures your estate plan remains legally sound and supports your goals, no matter where life takes you.
Legal and Tax Changes That Require Updates
Changes in legal and tax regulations at both federal and state levels can have a significant impact on the effectiveness of your estate plan, often requiring timely updates to ensure it remains aligned with current laws and your intentions. Federal estate tax laws, for example, frequently undergo revisions that can alter exemption amounts and tax rates, directly influencing wealth transfer strategies.
The Tax Cuts and Jobs Act (TCJA) of 2017, which dramatically increased the federal estate tax exemption, is a clear example. This change prompted many families to reevaluate their estate plans to capitalize on the higher exemption. However, with this provision set to expire at the end of 2025, unless extended, wealthy families may need to revisit their plans to address potential changes in the law.
Similarly, the SECURE Act brought significant changes to retirement account regulations, including adjustments to required minimum distributions and inherited IRA rules. These updates have affected many families’ beneficiary designations and retirement asset distribution strategies, underscoring the importance of regular plan reviews to account for such shifts.
Estate and inheritance tax laws can also evolve at the state level, often introducing changes like modified tax thresholds or new inheritance taxes. Estate plans created under older regulations may no longer be optimal, making periodic reviews essential to avoid unintended consequences.
Lastly, powers of attorney and healthcare directives must keep pace with advancing healthcare practices and evolving legal requirements. For instance, changes in digital asset laws or medical directives often require updated provisions to maintain validity. Staying proactive about these changes is key to ensure your estate plan remains effective, compliant, and capable of protecting your legacy.
TrueNorth Wealth Is Here to Help
Estate planning isn’t a one-time task—it’s an ongoing process that requires regular attention to stay effective. A proactive approach ensures your estate plan evolves alongside your life circumstances, protecting your family’s future and preserving your legacy. By keeping your plan up to date, you can pass down not only your assets but also your values with confidence and clarity, leaving a meaningful impact for generations to come.
The best time to review your estate plan is today. At TrueNorth Wealth, our team of fiduciary CFP® professionals specializes in helping families craft comprehensive strategies to protect and transfer their assets, minimize risks, and optimize their tax outcomes. We’re here to guide you through a thorough review of your wealth transfer plan, ensuring it reflects your personal values and aligns with your long-term financial goals.
TrueNorth Wealth is among the top Wealth Management firms in Utah and Idaho, with offices in Salt Lake City, Logan, St. George, and Boise. At TrueNorth Wealth, we focus on helping our clients build long-term wealth while maximizing the enjoyment they receive from their money. We do this by pairing our clients with a dedicated CFP® professional backed by an incredible team.
For our team at TrueNorth, it’s about so much more than money. It’s about serving families all across Utah and helping them achieve freedom and flexibility in their lives. To learn more or schedule a free strategy session, visit our website at TrueNorth Wealth or call (801) 316-1875.
