Conducting a Periodic Review of Your Estate Plan

What is conducting a periodic review of your estate plan?

With your estate plan successfully implemented, one final, but critical, step remains–carrying out a periodic review and update.

Everyone has different life events and changes, both planned and unplanned, which may affect their individual estate plan. These personal changes are in addition to changes in tax laws, the stock market, the economic climate, and other external factors. After all, if the only constant is change, it isn’t unreasonable to speculate that your wishes may have changed, the advantages you sought have eroded or vanished, or even that new opportunities now exist that could offer a better value for your estate. A periodic review can give you peace of mind.

When should you conduct a review of your estate plan?

Every estate will be different and there are many life events, which may create the need to adjust your estate plan. Tax laws and economic situations change frequently, and it can be helpful to ensure your estate plan is adjusted accordingly. Here are a few general scenarios, which may create the need to review your estate plan.

Upon changes in estate valuation
If the value of your estate has changed more than 20 percent over the last two years, you may need to update your estate plan.

Upon economic changes
You need to review your estate plan if there has been a change in the value of your assets, or your income level or requirements, or if you are retiring.

Upon changes in occupation or employment
If you or your spouse changed jobs recently, you may need to make revisions in your estate plan.

Upon changes in family situations
The following situations may create a need to update your plan:

1. Your (or your children’s or grandchildren’s) marital status has changed
2. A child (or grandchild) has been born or adopted
3. A member of your immediate family has passed away
4. You or a close family member has become ill or incapacitated
5. Other individuals (e.g., your parents) have become dependent on you.

Upon changes in your closely held business interest
The following topics related to business could create the need for a review of your estate plan:

1. Formed, purchased, or sold a closely held business
2. Reorganized or liquidated a closely held business
3. Instituted a pension plan
4. Executed a buy-sell agreement
5. Deferred compensation
6. Changed employee benefits.

Upon changes in the estate plan
Of course, if you make a change in one part of your estate plan, (e.g., create a trust, execute a codicil, etc.), you should review the whole estate plan to ensure it remains cohesive and effective.

Upon major transactions
Consider reviewing your plan if you have:

1. Received a sizable inheritance, bequest, or similar disposition
2. Made or received substantial gifts
3. Borrowed or lent substantial amounts of money
4. Purchased, leased, or sold material assets or investments
5. Changed residences
6. Changed significant property ownership
7. Become involved in a lawsuit

Upon changes in insurance coverage
Making changes to your insurance coverage may affect your estate planning needs or may make changes necessary. Therefore, inform your estate planning advisor if you make any change to life insurance, health insurance, disability insurance, medical insurance, liability insurance, or beneficiary designations.

Upon death of trustee/executor/guardian
If a designated trustee, executor, or guardian dies or changes his or her mind about serving, you need to revise the impacted parts of your estate plan (e.g., the trust agreement and your will) to replace that individual. This is a great opportunity to select a corporate trustee to manage your estate. Arvest Trust Professionals bring years of experience and offer impartial, full-time administration of your trust and its assets.

Upon other important changes
None of us has a crystal ball. We can’t think of all the conditions that could prompt us to review and revise our estate plans. However, consider areas of your life that may have changed recently. Have your feelings about charity changed? Has your child become financially responsible? Have you or your spouse had health challenges? Are your children through college now? It could also be helpful to make an appointment with an experienced professional, such as a trust officer at Arvest Wealth Management, who can offer guidance tailored to your specific situation and recommend adjustments along the way.

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Arvest Wealth Management does not offer tax or legal advice – consult a professional.