Creating an estate plan is an important step, but it is not something you should prepare once and then forget about for the rest of your life.
Families change. Assets change. Businesses grow. Relationships evolve. The people you originally selected to make financial or healthcare decisions for you may no longer be the right choices years later.
For these reasons, reviewing your estate plan periodically can be just as important as creating it in the first place.
There is no single schedule that works for everyone, but certain life events should prompt you to take another look at your will, trust, powers of attorney, healthcare documents, and beneficiary designations.
Why Should You Review Your Estate Plan?
An estate plan is designed around your circumstances at a particular point in time.
If those circumstances change but your documents do not, your estate plan may no longer reflect your wishes.
For example, your original will may name someone as executor who is no longer available or appropriate. A trust may include instructions that no longer fit your family. Beneficiary designations on financial accounts may also be outdated.
Regular reviews help identify these issues before they become problems.
How Often Should You Review Your Estate Plan?
Even when there has not been a major life event, it can be helpful to review your estate plan periodically.
Many people choose to look at their documents every few years to confirm that the people, property, and instructions listed still make sense.
A review does not necessarily mean your documents need to be changed.
Sometimes the review simply confirms that the existing plan still reflects your goals.
The most important time to review an estate plan, however, is after a significant change in your personal, family, or financial circumstances.
Marriage or Remarriage
Marriage can significantly affect estate planning.
After getting married, you may want to reconsider who should receive your property, who should make decisions for you, and how assets should be managed for your spouse or other family members.
Remarriage can create additional considerations, particularly when one or both spouses have children from previous relationships.
Estate Planning for Blended Families
Blended families often require more careful planning because there may be competing goals.
For example, you may want to provide financial security for your spouse while also preserving assets for your children.
Relying only on default inheritance rules may not produce the result you intended.
A well-coordinated estate plan can provide clearer instructions about how property should be handled.
Divorce or Separation
Divorce is another major reason to review your estate planning documents.
You may need to reconsider:
- Your will
- Your revocable living trust
- Powers of attorney
- Healthcare decision makers
- Beneficiary designations
- Life insurance
- Retirement accounts
- Property ownership arrangements
Even when Texas law affects certain provisions after divorce, it is better to review the entire estate plan rather than assume every document and account will automatically operate the way you want.
Birth or Adoption of a Child
Welcoming a child into your family is an important reason to revisit your estate plan.
Parents may want to consider who should care for their children if both parents are unable to do so.
You may also want to decide how assets should be managed for children who are too young to handle an inheritance themselves.
A will, trust, beneficiary designation, and other planning tools can work together to create a more complete plan for your family.
Your Children Become Adults
An estate plan created when your children were young may not be appropriate after they become adults.
You may have previously planned for assets to be managed for them until a certain age.
Years later, you may decide that your children are ready to take on additional responsibilities or that different protections are still appropriate.
You may also want to reconsider who should serve as trustee, executor, or other fiduciary.
A Beneficiary Develops Special Needs
If a family member develops a disability or has needs that could affect eligibility for certain public benefits, an existing inheritance plan may need to be reconsidered.
Leaving assets directly to a beneficiary without considering those circumstances can create unintended consequences.
A Special Needs Trust or another planning strategy may be appropriate depending on the situation.
This is an area where individualized legal guidance is particularly important.
The Death of a Beneficiary or Person Named in Your Plan
Estate planning documents often name multiple people for different responsibilities.
These may include:
- Beneficiaries
- Executors
- Trustees
- Agents under powers of attorney
- Healthcare decision makers
- Guardians
If one of these people dies, becomes unavailable, or is no longer someone you want in that role, your plan should be reviewed.
Even when you named an alternate person, it is still worth confirming that the overall plan remains appropriate.
A Significant Change in Your Financial Situation
Your estate plan should reflect the assets you actually own.
A major increase or decrease in wealth can affect how your plan should be structured.
Examples include:
- Receiving an inheritance
- Selling a business
- Starting or purchasing a business
- Acquiring significant real estate
- Selling major assets
- Receiving a large investment gain
- Retirement
- Major changes to life insurance coverage
A plan that worked when your financial situation was relatively simple may need to evolve as your assets become more complex.
Buying or Selling Real Estate
Real estate is often one of the largest assets in an estate.
If you buy property after creating a trust or estate plan, you should consider how that property fits within your existing structure.
This can be especially important if you own property in more than one state.
Selling property can also affect provisions in a will or trust if those documents refer to a particular asset.
Starting or Owning a Business
Business owners often have estate planning concerns that extend beyond personal assets.
Your plan may need to address what happens to the business if you die, become incapacitated, or decide to retire.
Questions may include:
- Who will manage the business?
- Will ownership pass to family members?
- Will another owner purchase your interest?
- How will the business continue operating?
- Does the estate plan coordinate with business agreements?
These questions are part of business succession planning and should be reviewed as the company changes.
Moving to Texas or Moving to Another State
Estate planning laws vary from state to state.
If you created your estate plan elsewhere and later moved to Texas, it is sensible to have the documents reviewed by a Texas estate planning attorney.
Similarly, moving away from Texas can be a reason to review your plan under the laws of your new state.
A move does not necessarily mean every document must be replaced, but a legal review can identify provisions that should be updated.
Changes in Family Relationships
Not every important change involves marriage, divorce, birth, or death.
Relationships themselves can change.
Someone you trusted ten years ago may no longer be the person you want handling financial or medical decisions.
You may also become closer to another family member or friend whom you would prefer to serve in an important role.
Your estate plan should reflect your current relationships rather than circumstances that existed many years ago.
Changes to Your Executor or Trustee
Choosing the right people to carry out your estate plan is important.
An executor may be responsible for administering your probate estate, while a trustee may manage assets held in a trust.
Over time, the person you selected may:
- Move away
- Develop health problems
- Become too busy
- No longer have a close relationship with you
- Become unwilling to serve
- No longer be the person you trust for the responsibility
Reviewing these appointments can help prevent complications later.
Review Your Beneficiary Designations Too
Updating your will or trust may not be enough.
Certain assets can pass according to beneficiary designations rather than according to the terms of your will.
These may include retirement accounts, life insurance policies, and certain financial accounts.
As part of an estate plan review, it is important to look at beneficiary designations and make sure they coordinate with the rest of your plan.
Outdated beneficiary information can create results that are very different from what you intended.
Review Your Powers of Attorney and Healthcare Documents
Estate planning is not only about what happens after death.
Your plan should also address what happens if you are alive but unable to manage financial or healthcare decisions yourself.
That is why reviewing your Powers of Attorney and Healthcare Directives, and Living Wills is an important part of maintaining an estate plan.
Ask yourself:
- Is the person I named still someone I trust?
- Is that person still willing and able to serve?
- Have my healthcare wishes changed?
- Do my family members know where these documents are located?
Keeping these documents current can make it easier for others to act if they are ever needed.
Does Updating Your Estate Plan Mean Starting Over?
Not necessarily.
Sometimes only a limited change is needed.
In other situations, major changes to your family, finances, or objectives may make a more comprehensive revision appropriate.
The important point is not to make changes informally.
Writing notes on an existing will, crossing out language, or relying on verbal instructions can create confusion and may not legally accomplish what you intended.
Estate planning changes should be made using the appropriate legal documents and procedures.
Do Not Wait for a Major Problem
Many people plan to update their estate documents “someday.”
The problem is that estate planning often becomes most important when circumstances change unexpectedly.
A periodic review allows you to address questions while you are able to make decisions clearly and deliberately.
If your documents are several years old, or if your life has changed significantly since they were prepared, reviewing them may be worthwhile.
Talk With a Houston Estate Planning Attorney
Your estate plan should continue to reflect your family, assets, responsibilities, and goals as your life changes.
If you already have a will, trust, powers of attorney, or healthcare directives, our firm can review your existing plan and help determine whether updates may be appropriate.
If you do not yet have an estate plan, we can also help you understand the available options and create a plan designed around your circumstances.
Contact us to schedule an estate planning consultation in the Houston area.
