When to Have Your Estate Plan Reviewed

December 9, 2015

Estate plans prove themselves most valuable when they reflect your current life situation and financial position. An out-of-date estate plan can often leave you short, owing unexpected taxes, paying higher fees and protecting yourself and your children less than you had hoped. For your estate plan to be most effective, it must address your current personal situation and financial position.

To help you understand the factors that influence a decision of when to have your need of an estate plan review, our estate planning attorneys have shared a list of key considerations.

Life Changes – Key Reasons to Review and Update Your Estate Plan

If there have been significant life changes, you should have your estate plan reviewed by a qualified Wisconsin estate planning attorney.

Marriage or Divorce

In the event of a marriage or divorce, you should have your estate plan reviewed as it will likely need to be updated. To do otherwise could result in Wisconsin’s one-size-fits-all law supplementing your estate plan based upon the marriage or divorce, usually with unintended – and undesirable – consequences. Your plan should be crafted to reach your goals and desires. Failure to address a marriage or divorce in your estate plan could land you with a plan crafted by Wisconsin legislators which does not accomplish your goals and desires during life or upon death.

Family Changes

The birth of a child, the death of a child, or if a child or grandchild becomes disabled are all valid reasons to have your estate plan reviewed. A change to the care requirements of children and grandchildren, especially those with significant health concerns or special needs can require a change to an estate plan.

A Change in Assets

An expected and significant change to your net worth and assets should also trigger an estate plan review. Proper estate plans are crafted to meet the financial goals as and when they are written. While they can offer some flexibility, and will certainly accommodate a natural ebb and flow of financial well being, a major and unexpected change in your financial position should cause you to revisit your estate plan.

Relocating to Wisconsin

If you have recently moved your primary residence to Wisconsin, your estate plan should be reviewed to make sure it complies with Wisconsin law. Probate, tax and estate planning laws vary from state to state and from country to country, so a careful review of your estate planning can determine if any updates or changes are needed.

The Passage of Time

Even if there have not been any significant life changes, it is a good practice to have your estate plan reviewed every five years and certainly every decade. As mentioned below, law changes with respect to estate planning are perpetual and are a primary reason to have your plan reviewed. If you are older, the passage of time typically results in more clarity about what you want your estate plan to accomplish and the discussion of long term care and nursing home care will need to be made part of the estate planning discussion. As you age, the avoidance of probate is typically an item that becomes more and more important to our clients.

For a lot of clients a simple Last Will and Testament, Durable Power of Attorney and Health Care Power of Attorney was a sufficient estate plan when they were younger. However, as we age the benefit of avoiding probate, protecting assets from a nursing nome, or providing protection from creditors of our children and other beneficiaries is often a desire that requires an update to your estate plan. The goals and concerns of a 40 or 50 year old are often dramatically different than the goals and concerns of a 70 or 80 year old. For example, many of our clients in their 60’s and up want to protect a house from long term care nursing home costs through the use of an irrevocable income only trust, or, they want to avoid probate through the use of a Revocable Trust. It is important to understand that a Will or Last Will and Testament will not avoid probate, so what was sufficient for a younger couple may no longer be appropriate as we age.

Changes in Children’s Lives

Sometimes an estate plan should be updated due to changes in the lives of your children or other beneficiaries, including grandchildren.

If a beneficiary, or child or grandchild has personal issues, shows signs of an inability to manage funds well, or is at risk of divorce, it is time to have your estate plan reviewed and possibly updated to help ensure that your hard earned assets will not be lost to creditors, squandered on frivolous items, or lost to a child’s spouse in divorce.

In addition, if a child or grandchild has an alcohol or drug problem, a properly structured trust that requires treatment or at least protects the child from abusing him or herself with the inherited funds, is a good idea. In the unfortunate case where such a dependency arises, it can be a very good idea to review your estate plan.

The bottom line is that it is important to take into account your beneficiaries’ lives when thinking about and reviewing your estate plan.

Changes in the Law

Tax laws change and a reason to periodically have your estate plan reviewed. In Wisconsin, we recently saw major changes to trust and Durable Power of Attorney laws such as the recently revised Wisconsin Trust Code. Some of the changes include strengthened protections for trust beneficiaries, the adoption of “Pet Trusts” and the ability to use “Trust Protectors” to keep a trust’s administrative powers and trustees current, while limiting court involvement. These changes are only a few examples that might require a review and update of your estate plan.

The laws governing special needs trusts, long term care and asset protection from nursing homes are constantly changing. They change on a yearly basis. If your estate plan has not been reviewed in the last couple of years and you desire long term care protection or have a disabled child or grandchild, your plan needs to be reviewed.

It’s Not Really About Cost

While we appreciate that cost is always a factor in estate planning, it is crucial to understand that it is unwise to take a “penny wise and pound foolish” approach to reviewing your estate planning. Deciding against an estate plan review to save a couple thousand dollars in the short term may prove imprudent if it costs your estate tens of thousands of dollars in unexpected tax, probate or other fees.

Contact Us to Discuss Your Plan

The value of a well-drafted and current estate plan that fits your needs and goals cannot be overestimated. The key to keeping your estate plan current and fit-for-purpose is to conduct reviews of it when appropriate, under the guidance and counsel of seasoned estate planning lawyers. At Wokwicz Law Offices, LLC, we welcome new clients and returning clients who would like to review their own plan.