In some cases, outdated or inadequate estate plans have led to highly-publicized disputes between heirs that have squandered fortunes and diminished legacies. These situations are more tragic because they are usually entirely avoidable, especially when advisors are willing to facilitate difficult conversations.
An estate plan is no "one and done" project. In fact, it's very much like a snapshot of your life and your wishes at the time it was created. As your life changes, your priorities will shift. Consequently, it is very important to update your estate plan regularly.
“An estate plan is not a time capsule to be opened and dissected at some distant point in the future," according recent Forbes article. The article, titled "Why You Should Update Your Estate Plan," explains that many ultra-wealthy individuals have a valid estate plan in place, but have not reviewed and updated their plans after they first signed them. In some instances, an outdated or insufficient estate plan have caused disputes between heirs. Unfortunately, many of these situations are even more tragic because they are usually avoidable, especially when professionals can facilitate difficult conversations.
The original article notes that family members will often shy away from the estate planning process because it typically means some tough discussions. However, the article reminds us that this can be a wonderful opportunity for your estate planning attorney to educate family members on the benefits and risks of planning while helping to bridge family divides. In fact, the "key is to evaluate the impact on the estate or wealth transfer plan of all major decisions and life events as elements of a broader generational family wealth strategy." As a result, this can simplify an ongoing process and reduce the possibility of damaging legal disputes on the disposition of family assets in the future.
The easiest way to decide when to review your estate plan is: (i) when there is a meaningful change in your life; or (ii) every few years just to make sure you are up-to-date with the changing tax laws. Contact your estate planning attorney to make sure your estate plan is current and your wishes will be carried out when the time comes.
Reference: Forbes (July 3, 2014) "Why You Should Update Your Estate Plan"