A common pitfall for many individuals and families in estate planning is thinking that the work is done when the original plan is created. Changes in finances, life circumstances, health, or even the economy and the law mean that estate plans should be updated and reviewed regularly. Failure to do so can result in unpleasant surprises when the time comes, such as assets that aren’t covered, a hefty tax bill, or beneficiaries or a will that doesn’t comport with your wishes.
For many individuals, this review occurs annually or even more often. People who review their financials quarterly, semi-annually, or annually should also review their estate plans while their financial picture is in front of them. A natural time to do this is while preparing and filing your annual taxes.
Every two to three years, and at minimum every five years, have an attorney formally review your estate plan. An estate planning attorney can consider any changes to your circumstances and determine if your plan still fits your needs. Your lawyer will also know if any changes in the law will impact your plans or your assets and recommend updates to make and ways to proceed. For example, changes to tax laws may necessitate a change in strategy to protect your assets for your future beneficiaries.
Regardless of timing, a big life event should also trigger a meeting with an attorney to discuss an estate plan update. A change in financial situation, such as a career change, job loss, large inheritance or win in a lawsuit could prompt a modification to your estate plan. Changes in your wealth mean you may wish to change the way your assets are allocated to beneficiaries, or you may want to consider charitable donations or tax planning. And retirement is of course a significant life event that calls for considerable planning.
Significant life events such as marriage, divorce, or the birth of a child will also require reconsideration. In the case of marriage or divorce, for example, you may want to name your spouse as a beneficiary, executor of your estate, trustee, or a financial or health agent with power of attorney—or remove your former spouse from these designations. The birth of a child, particularly a first child, will require you to choose a guardian for the child and may require more long-term asset preservation in the event you do not want all of your assets to go directly to your spouse.
In addition, health changes should also prompt review. Unfortunately, a change in health for the worse can mean facing the unfortunate realities of deciding what to do with your assets or business when you are gone to ease any burdens your loved ones may face.
A Texas Estate Planning Attorney Can Help You Ensure Your Estate Plan Is Up to Date
To start or update an estate plan, you need a Houston estate planning attorney who knows how to tailor a plan for your unique situation. The team at McCulloch Miller, PLLC has over 40 years of experience establishing and updating estate plans for our clients. Contact our office at 713-936-9073 to schedule an initial consultation with an attorney on our team.