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If You Haven’t Been Regularly Reviewing Your Estate Plan, Start When You Hit 60
Sep 21, 2022
How frequently you should review your estate plan depends on how old you are and whether there has been a significant change in your circumstances. If you are over age 60 and you have not updated your estate plan in many decades, it is almost certain that you need to update your documents. After that, you should review your plan every five years or so. But if you are younger, you do not need to do so nearly as often.
Here are a few age ranges and what they mean in terms of estate planning:
18–30 Everyone needs a basic will, a durable power of attorney, and a health care proxy so that they have people they choose to step in and make decisions for them in the event of incapacity. And if you have children, you need a trust for property management for those children up to a mandatory age of distribution.
30–40 Once you begin accumulating assets, get married, and have children, it is important to create an estate plan to care for your loved ones in the event of your death. It also cannot hurt to update your will, durable power of attorney, and health care proxy, since the people you may have appointed at 18 (your parents?) may not be the people you want in these roles at 35.
40–60 Unless there has been a change in your circumstances, and assuming you have set a good plan in place during your 30s, you probably do not need to review your estate plan during your 40s and 50s. (Unless you are notified of a change in the laws that may impact you.)
60–70+ Once you reached 60, it is time to start regularly reviewing your estate plan. Your children are probably grown. You may have grandchildren. And, hopefully, you have accumulated some wealth and may need estate tax planning. The people you appointed to step in 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 are contemplating doing so. And, unfortunately, the chances of disability or death increase with every year and asset preservation planning may now be appropriate.
Change in Circumstances
While the timeline above outlines when you should review and perhaps update your estate plan, it needs to be supplemented by the following potential changes in circumstances that would warrant a review of your plan to see if it still meets your goals and needs:
- Marriage. You are likely to want your assets to go to your spouse and to name him or her to be your agent in the event of incapacity.
- Divorce. Likewise, if you get divorced, you probably will not want your assets to go to your ex-spouse or to rely upon him or her to step in if you were to become incapacitated.
- Children. Once you have children, you’ll want to provide for them by means of a trust with distribution at a mandatory age (i.e. 25, 30) and to name someone to step in as guardian in the event of your death or incapacity and that of their other parent, if any. Generally, once you have a plan in place you do not have to update it 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 sufficient assets to exceed the thresholds for state and federal estate taxes — $12.06 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 short, if you have no estate plan you should consider one. If you have an estate plan and have not reviewed or updated it in many years, contact the Estate Planning Attorneys at Kommer Bave & Ciccone LLP and we will help you through the process.