WHEN TO REVIEW YOUR ESTATE PLAN?
More Often Than You Think

How do you know when it's time to review your estate? Usually, an estate plan should be reviewed following a major life event. But even if you or your family does not experience a major life event (such as a birth, marriage or death) you should still monitor your estate plan periodically so that it will achieve your intended objectives.

As a general rule, you should contact your financial advisor and estate planning attorney, upon the occurrence of any one or more of the following events:

The 5-Year Rule - If it's been at least five years from your last estate plan tune-up, then it's time for another. Even if you haven't had a major life event affect you, tax laws change, portfolio values change and your future goals may change. Waiting more than five years is too long.

Family Changes - Births, deaths, marriages, divorces - any of these events in your family - should lead you to reconsider your estate plan. With every birth and marriage in your family, you add a potential beneficiary to your estate. A death obviously has the opposite effect, while a divorce may be the most complicated of all. If your son or daughter divorces, you may wish to remove the former spouse from your estate plan but retain a place for the divorced couple's children - your grandchildren.  You should also feel comfortable with the individuals you’ve named throughout your Will, Trust, Durable Power of Attorney, and Health Care Proxy, as your Executors, Guardians, Trustees, Attorneys-in-fact, and Health Care Agents.

Health Issues - Long-term medical care is a major expense. If someone in your family requires such care - or if you think someone might require it in the future - you might consider special provisions in your estate plan to cover these expenses.

Retirement - If you plan to retire within the next five years, effective estate planning is extremely important. Your retirement may not immediately affect your estate plan, but it will have an eventual impact. For example, instead of adding to your estate and trying to generate wealth, you will probably begin to withdraw assets for retirement income. This 180-degree turn may cause you to rethink your estate plan.

Current Trust Provider Closes/Merges - The banking and financial services industry is currently experiencing consolidations and mergers. If such an event affects your current trust provider - and results in reduced or no trust service - you should consider examining your estate plan and move your trust to a more stable financial organization.

Family Business - A business venture presents additional complications because, depending on the marketplace, your business may be constantly evolving. A sole proprietorship may become a partnership that may become a corporation.

Portfolio Investment Performance - If the total value of your estate has increased or decreased 20% since you last reviewed your estate plan, you should probably review it again.  Both you and your attorney should have an updated summary of your assets and liabilities.  It is a good idea to have a discussion with your attorney regarding gifting excess assets to children/grandchildren now to reduce and/or eliminate estate taxes upon death.

Future Philanthropic Motives - If you'd like to leave some or all of your estate to charity, you may wish to structure an estate plan using charitable trusts and/or donor advised funds.  These estate planning vehicles can also provide you or your estate with several immediate and long-term tax saving benefits.

Life Insurance Purchase - If you purchase a life insurance policy it may be best to put it in a life insurance trust so it is kept out of your estate.  If you currently have an insurance trust or an irrevocable trust, you should be sure you have complied with all annual requirements mandated by the IRS (i.e. “Crummey Notices,” Gift Notices, and Gift Tax Returns.)

Proper Funding - Have you properly funded your revocable trust (i.e. changed ownership on various investment accounts or with respect to real property and/or changed beneficiary designations in connection with life insurance policies and retirement accounts)?  You may have a set of fully-executed documents in place, but the most significant aspect of estate planning is the retitling process.