When to Update Your Estate Plan
Written by Teresa D. Lancaster
Many of our clients often ask, “When should my estate plan be updated?” It is a great question and one that often elicits the classic lawyer answer of “it depends.” However, here are some guidelines to follow when determining whether or not it is time to update:
1. Major Life Changes. Often times life changes in ways that affect your estate plan. This could be the birth of a child, the death of a spouse or beneficiary, a divorce, health issues, a new job, or a major change in your financial situation. These are all times when you should go back to your estate plan to see if it is still appropriate.
2. Changes to Fiduciaries. When setting up a plan every person selects individuals or professionals to serve in fiduciary roles as a trustee, financial agent, health care agent, and/or personal representative (aka executor). Over time, people named for these roles may need to change due to the named person’s health, death, or simply a change in circumstance – such as a child reaching an age where they can now serve in these roles. It is a good idea to regularly review whom you have named and determine whether that person is still appropriate to act on your behalf.
3. The Five-Year Rule. You may often hear that your powers of attorney should be redone every five years. While there is no legal rule stating that a power of attorney expires, often as these document age, financial and health care institutions are less likely to accept these documents. Due to the concern that these documents may not be accepted when necessary, our general recommendation is to update these documents every five years.
4. Change in Location. If you have moved to a new state, it is a good time to seek an attorney in that area to review your current estate plan. It may be in your best interest to execute new documents specific to that state. Though your estate plan is likely still enforceable, even if you move to another state, there are state-specific laws that it may benefit you to incorporate in your estate planning documents upon a move. If you move outside of the US, then your estate plan may no longer be enforceable, especially regarding non-US assets and the oversight of your health care, so checking with foreign legal counsel is especially important.
5. Annual Review. Each year we recommend that you find your estate plan and review it; hopefully our green binder makes it easier to find these documents. Make sure you have the people you want in place for financial and health care decisions. Also, take a look at who receives your assets upon your death, so that you can ensure it is still a plan that meets your wishes.
If you have executed an estate plan with Bogutz & Gordon, we strive to send annual review letters to our clients letting you know of changes in Arizona law and any other general updates we think you may find useful. If you are not receiving these letters and would like to, please contact our office at (520) 321-9700 to be added to the list.