In our Florida estate planning practice, we often encounter clients who haven’t given their estate plans a second thought since their initial creation.  Life is dynamic, however, and changes both big and small can significantly impact the effectiveness and relevance of an existing estate plan. 

As the year winds down, it’s a particularly opportune time to reflect on these changes and assess whether your estate plan still aligns with your current circumstances and future goals. The end of the year provides the perfect time for reflection, serving as a natural checkpoint to review personal, financial, and legal affairs. Updating your estate plan is a crucial task that many overlook during this period. It’s not just about adjusting for material changes but also about ensuring that your wishes are accurately and effectively represented in all legal documents. 

Let us share ten key indicators that it might be time to update your estate plan, based on common scenarios we see in our practice. These pointers serve as a guide to help you navigate the often-overlooked yet essential aspect of personal and familial financial planning.

  1. Changes in family dynamics. One of the most common reasons to update an estate plan is a change in your family structure. This could include marriage, divorce, the birth of a child or grandchild, or the death of a family member. These life events can drastically alter how you wish to distribute your assets and should prompt a review of your estate plan.
  2. Alterations in your financial situation. Significant changes in your financial situation, such as acquiring or selling major assets, such as a home or business, receiving a large inheritance, or experiencing a substantial increase or decrease in your net worth, can impact your estate planning needs. These changes might necessitate a different strategy for asset distribution, tax planning, or setting up trusts.
  3. Relocation to a different state. If you’ve moved to a different state, it’s important to update your estate plan to comply with the new state’s laws. Estate planning laws can vary significantly from state to state, particularly regarding taxes, probate procedures, and legal requirements for wills and trusts.
  4. Changes in tax laws. Tax laws, especially estate tax laws, can change frequently. It’s essential to review your estate plan in light of any recent tax law changes to ensure that your plan is still efficient and effective in minimizing tax liabilities for your heirs.
  5. Reaching a milestone age. Certain ages can trigger different planning considerations. For example, in most situations at age 72, you may need to take required minimum distributions from retirement accounts, which can impact your estate planning. At other ages, you might become eligible for government benefits like Medicare, which could also necessitate changes to your plan.
  6. Passage of time. It’s a good practice to review your estate plan periodically, even if no significant changes have occurred. As time passes, your wishes and priorities may evolve, and it’s important that your estate plan reflects your current intentions.
  7. Health Changes. Significant changes in your health or the health of a beneficiary can necessitate a review of your estate plan. For instance, if you or a beneficiary becomes seriously ill, you may want to adjust how your assets are distributed or consider setting up a special needs trust. Additionally, changes in health can impact decisions about the medical power of attorney and living wills.
  8. Changes in business ownership or interests. If you are a business owner, changes in your business, such as a substantial increase in value, a buyout offer, or even a decision to retire or sell the business, should prompt a reevaluation of your estate plan. How your business interests are handled in your estate can have significant tax and legacy implications.
  9. Shifts in philanthropic goals. Over time, your philanthropic interests and goals may evolve. If you’ve developed a new interest in supporting certain causes or charities, or if you wish to increase your philanthropic giving, updating your estate plan can ensure that these wishes are honored. This may include setting up charitable trusts or adjusting your will or beneficiaries to include charitable donations.
  10. Preparation for long-term care. Planning for potential long-term care needs is an often overlooked aspect of estate planning. As you age, the likelihood of requiring long-term care increases. If you or your spouse are facing a health crisis or are at an age where health issues are more probable, it’s crucial to update your estate plan accordingly. This may involve setting aside funds for long-term care, revising your health care directives, and ensuring that your power of attorney documents are up-to-date. It’s also important to consider how the costs of long-term care might impact your overall estate and the inheritance you plan to leave behind. Addressing these issues in your estate plan can provide clarity and security for you and your family during challenging times.

In conclusion, regularly reviewing and updating your estate plan ensures that it aligns with your current life circumstances and goals. It’s advisable to consult with an estate planning attorney to guide you through the process and ensure that your plan is comprehensive and up-to-date. Remember, a well-maintained estate plan is a crucial part of securing your legacy and providing for your loved ones.

We know this article may raise more questions than it answers. At Perlin Estate Planning & Probate our credentials enable us to provide a multi-disciplinary approach to our legal services.  By building relationships with our clients, we are also able to understand each client’s needs and desires, and we support such goals through thoughtful, comprehensive planning techniques. We encourage you to contact us and schedule a meeting.