Set a Date with Your Future: Why You Must Review Your Estate Plan Annually

A common mistake many people make is treating their estate plan (Wills, Trusts, Powers of Attorney, and healthcare directives) like a one-and-done chore. They sign the documents, file them away, and assume everything is handled forever.

This assumption is dangerously wrong.

An estate plan is a dynamic document intended to reflect your life and your assets, both of which are constantly changing. Failing to review it annually is the single fastest way to render it ineffective, leading to family disputes, unnecessary taxes, and outcomes you never intended.

Here are the critical reasons why a yearly check-up of your estate planning documents should be non-negotiable.

1. Life Happens: Major Milestones and Family Changes

Your estate plan is designed around the people and relationships in your life. When those relationships shift, your documents must shift too.

• Marriage or Divorce: A new spouse is rarely automatically included as an heir unless specifically named. Conversely, a divorce may automatically void bequests to an ex-spouse, but not always, and the effect on non-probate assets (like IRAs) can be complicated.

• Births or Deaths: The arrival of a new child or grandchild (or the passing of a named beneficiary, executor, or trustee) necessitates updates to ensure the next generation is properly provided for or that backup appointments are current.

• Moving States: Estate laws vary significantly by state. A Will drafted in Idaho may still be valid in Georgia, but its efficiency and effectiveness can be severely compromised.

2. The Unpredictable Changes in Asset Allocation

Did you sell your old house and buy a new one? Did you start a new business? Did you forget to update the beneficiaries on a new bank account or a 401(k)?

• Titled Assets (Probate vs. Non-Probate): Many people rely on their Will, but often forget that certain assets (like IRAs, life insurance, and joint bank accounts) may be considered non-probate assets. An annual review ensures your Will and your beneficiary designations are perfectly aligned.

• Asset Growth/Sale: The specific bequests you named five years ago might no longer make sense today if certain assets have significantly grown, been sold, or lost value.

3. Law Changes: The Shifting Sands of Tax and Property Law

You may not be a high-net-worth individual, but annual legislative changes can still impact your estate plan.

• Tax Exemptions: Federal and state estate and gift tax exemption limits are frequently changed by Congress. An annual review ensures your Trusts and gifting strategies are designed to take maximum advantage of the current year's laws, potentially saving your heirs millions in taxes.

• Power of Attorney Laws: States often update the requirements for executing a Power of Attorney (POA) or Healthcare Directive. A document that was legally sound five years ago might lack a necessary clause or witness requirement under the most recent statutes, making it useless when your family needs it most.

Don't Wait Until It's Too Late: Schedule Your Annual Review

A comprehensive annual review with your estate planning attorney should cover three key areas:

1. People: Have your relationships, health, or personal wishes changed? Are your named Executors, Trustees, and Agents still the best choices?

2. Property: Have you acquired or sold any major assets? Are all beneficiary designations current?

3. Provisions: Has the law changed in a way that impacts your tax planning or the validity of your documents?

Don't let an outdated document cause a future crisis. Make an annual review of your estate plan a fundamental part of your financial and legal health.

Is your current estate plan over a year old? Contact our firm today to schedule your comprehensive annual review and ensure your final wishes are protected.