Every young adult should create a basic estate plan, regardless of the monetary value of their estate. If you created an estate plan when you were younger, you may have done what most people do after it was complete – absolutely nothing. One of the biggest estate planning mistakes is to create a plan and then fail to review the plan down the road. To help prevent you from making this common mistake, the Long Island estate planning attorneys at Eghrari Wealth Training Firm discuss how often you should review your estate plan.
Why Is Having an Estate Plan Important?
A Last Will and Testament is usually the first estate planning document created by someone who is new to estate planning. Every adult can benefit from having this most basic estate plan in place. A simple Will prevents you from dying intestate. The reason you want to avoid dying intestate is that if you do, the State of New York effectively creates your estate plan for you. An intestate estate is distributed using the New York (or applicable state) intestate succession laws. By dying intestate, you give up the ability to decide who receives what assets from your estate. This alone is reason enough to have at least a basic estate plan in place. As time goes by, however, you may acquire more valuable assets and/or you may create a family. If so, your estate plan needs to reflect these changes.
When Should I Review My Estate Plan?
It is best to think of your estate plan as similar to your car or homeowner’s insurance policy. Every few years it’s a good idea to review the policy (or in this case your estate plan) to determine if any changes need to be made. A good rule of thumb is to make sure you conduct a routine review of your plan, with an estate planning attorney, at least once every five years. There are circumstances, however, that should prompt you to immediately review and update your estate plan, such as:
- Change in your immediate family. If you get married or divorce or you become a parent, you should update your estate plan to reflect the change. You want to protect a new spouse or child. Conversely, you don’t want a former spouse to inherit or remain in a fiduciary position after the divorce.
- Death of a beneficiary or fiduciary. Your existing estate plan may address the death of a beneficiary or fiduciary; however, it is always best to make sure. In the case of a fiduciary, such as the Trustee of a trust, you will need to appoint a new one.
- Your youngest child becomes an adult. Like many parents, you may have created a trust to protect the inheritance of your minor children. Once they are all adults, you may want to make changes to your estate plan to allow them to inherit directly from your estate.
- You move to a new state or country. Most laws and procedures relating to Wills, trust, and estates are governed by state law. As such, you need to review your plan if you move to a new state (or country) and make any necessary changes.
- Your financial pictures changes dramatically. A well drafted estate plan will account for the growth in your estate assets, but if suddenly inherit a small fortune or win the lottery, it is best to sit down with your estate planning attorney and update your estate plan.
Contact Long Island Estate Planning Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about when you should review your estate plan, contact the Long Island trust attorneys at Eghrari Wealth Training Firm by calling us at 631-265-0599 to schedule your appointment.