When Is It Time to “Service” Your Estate Plan?

When Is It Time to “Service” Your Estate Plan?

If you own a car, then you know it requires regular servicing in order to perform well and be reliable. More than likely, your car came with a recommended schedule for service, based on how many miles it has been driven; after a certain number of miles, you need to change the oil, replace the brake pads, rotate the tires, and so on.

If you have a newer car, you probably have an irritating dash light that comes on when it’s time for service and stays on until the mechanic resets it. Either way, whether you pay attention to the odometer or rely on that dash light, it’s pretty easy to know when it’s time to service your car. And if you keep driving it without servicing it, it’s a sure bet your car will let you down.

Like your car, your estate plan needs “servicing” if it is going to perform the way you want when you need it. Your estate plan is a snapshot of you, your family, your assets and the tax laws in effect at the time it was created. All of these change over time, and so should your plan. It is unreasonable to expect the simple will written when you were a newlywed to be effective now that you have a growing family, or now that you are divorced from your spouse, or now that you are retired and have an ever-increasing swarm of grandchildren! Over the course of your lifetime, your estate plan will need check-ups, maintenance, tweaking, maybe even replacing.

So, how do you know when it’s time to give your estate plan a check-up? Well, instead of having mileage checkpoints, your estate plan has event checkpoints. Generally, any change in your personal, family, financial or health situation, or a change in the tax laws, could prompt a change in your estate plan. Use the following list to guide you.

It’s a good idea to review your estate plan every year. Set aside a specific time every year (your birthday, anniversary, family gathering, or filing your taxes) to review it.

Event Checkpoints for Your Estate Plan

You and Your Spouse, If Married

You marry, divorce or separate

Your or your spouse’s health declines

Your spouse dies

Value of assets changes dramatically

Change in business interests

You buy real estate in another state or country

Your Family

Birth or adoption

Marriage or divorce

Finances change

Parent or relative becomes dependent on you

Minor becomes adult

Attitude toward you changes

Health declines

Family member dies

Other

Federal or state tax laws change

You plan to move to a different state

Your successor trustee, guardian or administrator moves, becomes ill, changes mind

You change your mind