We all know we’re supposed to change the oil in the car every 3,000 miles, clean our furnace filters monthly, and defragment our hard drives every week or so. But routine maintenance is one of those things that gets skipped when our schedules get too busy. So, we drive our car until it makes that weird noise, run our furnace until it breaks down, and cross our fingers that our computers are set up to do what they need to do on their own in the background.
Estate planning is similar in that it is not a one and done project. In an ideal world, everyone would review his or her estate plan each year to make sure it still reflects their current wishes. But that is easier said than done. The tax laws are always changing, and only experienced attorneys and tax professionals will be able to say whether an estate plan is taking full advantage of the current tax law.
Even knowing all this, most people don’t make an annual appointment with their attorney. In fact, a lot of people never make any follow-up appointments. This is a big mistake. We can’t begin to count the number of clients we have had who were upset Uncle Sam got more than he deserved when a loved one passed away, or worse, that the youngest grandchild was completely forgotten when their beloved grandparent passed away.
In order to avoid an upsetting situation, we recommend making an estate planning appointment each time someone in the family is born, dies, gets married, or gets divorced. This will ensure no loved ones are left out or inadvertently left in. It is also a good idea to update a plan when a child mentioned in the plan reaches adulthood because children and adults have such different needs.
If one of these big life events hasn’t occurred in the past five years, an appointment for an estate planning tune-up is probably needed anyway. Checking in on an estate plan at least every five years is necessary if one wants to take full advantage of our ever-changing tax code.
We all know an ounce of prevention is worth a pound of cure, and that applies to estate planning too. Try to make it in for a check-up at least every year, but definitely when a big life event happens or at least every five years.