By, Shirley Farmer, Attorney at Law
The information provided in this article is intended to give a general overview of the topic and is not intended as legal advice. For information specific to your situation, please talk with your estate planning professional.
Article #8, Reviewing and “Renovating” Your Estate Plan Regularly
Your estate plan is a long-term plan, and like owning a home it requires attention and maintenance. You’ve taken that important first step and worked with your estate planning professional to create your Will, Power of Attorney, Health Care Advance Directives, and maybe even a Trust. Now, if you are like most people, you relax knowing your estate plan is in place … and then you forget about it. Neglecting to keep you estate plan up to date can be just as risky as not having one at all! An effective estate plan only remains useful so long as it is up to date with your wishes and circumstances. I tend to recommended reviewing your estate plan at least every five years and when there are major life changes. It is important to look at your plan as a whole and at each item in your estate plan individually to make sure each is up to date.
When reviewing your Will, there are some key things to consider. First, look to your immediate family – has there been any change in your marital status (marriage, divorce, death of a spouse), or have you had any children or perhaps had a child pass away since your Will was drafted. Next look at your choice of Personal Representative and your backup Personal Representative. If either has passed away, is no longer able to perform the duties, or has moved far away, you will want to revise your choices. Also, as life rolls along sometimes people come to learn the person they had chosen as their Representative is no longer the best choice and replacing them with someone else you trust is in order. TIP: if you experience a change in your family structure or issues with your Personal Representatives like any of these, do not delay – contact your estate planning professional and make sure your plan is updated.
Next look at your beneficiaries and who is to receive what. If any of your previously named beneficiaries has passed away or is no longer someone you wish to benefit from your estate, you will want to update your Will. Sometimes family members and friends have a falling out and you may no longer wish for someone named before to receive your assets. Also, personal and financial circumstances of your beneficiaries change over time and perhaps there is a family member or friend who is now more in need than another and you would like to adjust the percentages or gifts given by your estate.
Along with reviewing your Will, you will want to check your Power of Attorney. In a standard Power of Attorney generally the powers granted do not change much over time; however, the choice of whom you have given those powers to often does. First, consider whether you currently have a durable Power of Attorney or non-durable version. Whichever you chose, make sure it is still what you want. Next, look at who you have given the power to. This is similar to the choice of Personal Representative in your Will, and for many people this is the same individual. If the person you appointed is no longer alive, able or willing to perform the duties for you, or no longer someone you trust to do so, it is time to get a new Power of Attorney. If the person appointed has relocated further away, it may also be good to consider a new Power of Attorney naming someone closer who will be able to perform the duties more conveniently.
Similar to the Power of Attorney, next look to your Health Care Advance Directives with the same considerations. Is the person you appointed as your Health Care Representative to make decisions for you when you cannot still the person you want making those decisions? Has the person become incapacitated herself, passed way before you, or moved away making it impractical to fulfill this role? Is the person someone you still trust to make these important life decisions? After you’ve considered your choice of Representative, review the choices you made regarding care options and consider if you still want the same things. Sometimes an individual may want to be kept alive under any circumstances but later in life change that position, or vice versa. Like with the Power of Attorney, any time there is a needed change in your choice of Representative or your choices for your care, it is important to update the Advance Directive immediately instead of putting it off.
If your estate plan includes a Revocable (Living) Trust, you should regularly review it to make sure it is kept up to date and effective. When reviewing your Trust, first look at the same considerations as with you Will – if there have been any changes in your family structure requiring updates to the Trust, choice of Trustees and Successor Trustees, and choice of beneficiaries and their share of your estate. In addition, when reviewing your Trust, carefully review the terms of what Trust funds are allowed to be used for, such as your medical care, living expenses, education, and any restrictions placed on the use of funds. Once you have confirmed the terms of your Trust are the way you wish them, go one step further and review the contents of your Revocable Trust. Do you still own the property previously put into the Trust? If not, have you acquired property that should be in the Trust but is not yet? A Revocable Trust must be funded and kept up to date. Regular review and keeping your estate planning professional advised of major life changes and changes in assets is very important to ensuring your Trust will meet the needs you wish when the time comes.
Creating a well-crafted estate plan is an important start. Once you have all the parts of your estate plan in place, look at it like owning a house – it requires inspection and maintenance or even the occasional “renovation” as the years go by to keep it serving you well!