Estate Plan Review and Modification

Estate plan review and modification should take place intermittently after wills, trusts and Powers of Attorney are executed.  Guidelines regarding WHEN estate plans should be reviewed are as follows:

Large Estates – where assets are valued in the millions, marital exemption trusts are established, and federal taxes are an issue, an estate plan should be reviewed annually.

Small Estates – should be reviewed every five years, unless the testator has had a major life change.

Changes in Value of Estate Assets – if the value of your estate has either increased or decreased more than 20%  – 25% over a two-year period, the plan should be reviewed to determine if there are necessary or recommended revisions.  (Given the changes in the value of real estate recently, and changes in the value of investments as the result of the current economy, this criterion may apply to many estate plans)

Changes in Financial Picture – If you retire, lose a job, receive a raise, satisfy a mortgage, or receive a windfall such as a significant inheritance or lottery winning, your estate plan deserves a review and probably revisions.

Divorce or remarriage – both events should result in a thorough review of your estate plan, particularly if the remarriage is a second or third marriage, and a prenuptial or postnuptial agreement is involved.

Birth or Death of a Beneficiary – If a beneficiary of your estate plan dies, it is a good idea to review your documents and remove the deceased person, even if you have provided for per stirpes succession.  If you adopt a child, or give birth to a child, you should make revisions to add the child.  Finally, if your spouse dies, you may need to revisit your estate plan.

Changes in your Family Circumstances – which may result in a new partner, if not married; serious illness or incapacitation of a family member, or changes with respect to  individuals who have become dependent upon you or are no longer dependent upon you.

Changed circumstances affecting a Closely Held Business – including the formation, purchase or sale of a closely held business; liquidation of reorganization of the business; institution of a pension plan; execution of a buy/sale agreement; deferred compensation or changes to employee benefits.

Changes in Insurance Coverage – including medical insurance, long-term care insurance, disability insurance or professional liability insurance may result in a need to revisit an estate plan and make necessary or recommended changes.

Death of a named executor, trustee and/or guardian – simple additions to the named fiduciaries should take place in this event, to ensure that you have sufficient nominations in place for initial and successors.

Relocation to a new State – should automatically result in a review of your estate plan, due to the fact that probate codes and laws are very state-specific.

Major life changes with Beneficiaires and/or Fiduciaries – Including but not limited to minor children reaching major, changed relationship between you and a named beneficiary, the birth of grandchildren, or any other significant changes in the lives of beneficiaries and/or fiduciaries that may have an impact on your estate plan, should result in a review and potential modifications.

Having gone to the trouble of executing an estate plan in the first place, make sure that you keep it current and in line with your distributive plan by reviewing the plan intermittently – make sure that your estate plan is still workable and effective upon the occurrence of changes that were not contemplated when the plan was executed.

Washington National Cemetery

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For more information on reviews and modifications of estate plans, or to schedule a free consultation with Christine C. Karr

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