How Often Should You Review Your Estate Plan?

If you are in the State of New Jersey and would like to discuss your estate plan, our team at Willis Law Group LLC is here to provide you with any assistance that you may need. To schedule a consultation, we encourage you to give our main office a call at (877) 296-2575 or attend one of our free educational workshops throughout New Jersey.

A question that we are often asked is How frequently should I review my estate plan? The simple answer is that it depends on how old you are and whether or not there have been any significant changes in your life recently. If you are over the age of 60 and have not updated your estate plan in many years, it is almost certain that you need to update your documents. After that, you should review your plan every five years or so. However, you do not need to review your documents nearly as often if you are younger.

Age

Here are a few age ranges and what they mean when it comes to estate planning:

18-30: You should have a durable power of attorney, health care proxy and HIPAA release so that you have people chosen to step in and make decisions for you in the event of incapacity.

30-40: Once you begin accumulating assets, get married and have children, it is important to create an estate plan in order to care for your loved ones in the event of your death. It also does not hurt to update your durable power of attorney, health care proxy and HIPAA release, since the people you may have appointed at 18 (likely your parents) may not still be the people whom you want in these roles at 35.

40-60: Unless there has been a change in your circumstances (and assuming that you put a good plan into place during your 30s), you probably do not need to review your estate plan during your 40s and 50s.

60-70: Once you have hit your 60s, it is now time to take another look at your estate plan. Your children are probably grown at this point, and you may have grandchildren. And, hopefully, you have also accumulated some wealth. Also, the people you appointed in the event of incapacity when you were 35 may not be in a position to assist when you are 65. You may have retired, or you may be contemplating to do so. And, unfortunately, the chances of disability or death increase with every year.

70+: You should now start to review your estate plan every five years or so. Changes happen on so many fronts, from your health and that of your loved ones, to the tax laws and the programs supporting long-term care or disability care. It is important to have a plan in place, and you need to adjust it as circumstances change.

Change in Circumstances

While the timeline above can serve as a general guideline, you will still need to supplement it with the following changes in circumstances that would warrant a review of your estate plan:

• Marriage. You are likely to want your assets to be given to your spouse, and to name him or her to be your agent in the event of incapacity.
• Divorce. In the event of divorce, you likely will not want your assets to go to your ex-spouse, or to rely on him or her to step in if you were to become incapacitated.
• Children. Once you have children, you will want to provide for them and to name someone as guardian in the event of the death or incapacity of you and the other parent. Generally, you do not have to update your plan if you have more children.
• Disability. If you or someone who would inherit from you becomes disabled, you will need to plan to protect and manage your assets, whether for yourself or for your beneficiaries.
• Wealth. If you accumulate enough assets to exceed the thresholds for state and federal estate taxes — $11.4 million federally — you may want to plan to reduce or eliminate such taxes.
• Moving. If you move to a new state or country, it will be important to have your estate plan reviewed to make sure it works in the new jurisdiction.

In summary, until you reach the age of 60 or so, you should review your estate plan whenever you have a change in circumstances such as those that are listed above. If you are over 60 and have not updated your estate plan in many years, now is the time to do so. After that, reviewing once every five years is definitely a good rule of thumb.