Let’s say you’ve just completed our 6-ish-month legacy planning program. You’ve pulled together all your important estate-related documents; named your executor, powers of attorney, and guardians for your children; and set up a plan that minimizes tax and maximizes what you’re able to leave to your kids/heirs and your favorite causes.
It’s time for a well-deserved cup of coffee…the good stuff.
One of the questions we tend to get from program graduates is “how often should I review or make changes to my plan?” Here’s an idea:
In general, you should review your plan every few years, just to make sure you remember what’s in place and to make sure it’s all still relevant. There are also some major life changes and milestones that may necessitate a review:
1. You should revisit your plan when you welcome a new member to your family.
Whether your family grows through the birth or adoption of a child, grandchild, or great-grandchild–or a marriage–it’s a good time to make sure your plan reflects that new relationship. Will that person receive an adequate share of your assets, and/or should they be added as a beneficiary on a trust or other account?
2. You should also review your plan when you lose a member of your family.
Has there been a divorce, has someone died, or has there been a significant relationship change resulting in wanting to exclude someone from your plan? It can be uncomfortable to make these types of changes, but the last thing you want is for your assets to end up with someone who has burned a bridge with your family–or for those assets to go to someone who is deceased. This can sometimes lead to lengthy, and costly, court battles.
You should also consider, in the case of a divorce or alienation from a family member, whether that change impacts that person’s children or grandchildren. It’s not uncommon for someone to exclude an ex-spouse from an estate plan, but leave their children as heirs, even if that’s in a lesser manner than biological children. In the same way, if a child is estranged, will their children (your grandchildren) still be heirs? These nuances are your decision, but should be made clear.
3. Make sure you keep an eye on your estate roles, and update your designations if needed.
A major piece of legacy planning is naming a power of attorney, healthcare power of attorney, guardian, personal representative trustee, etc. As folks named in those roles age, or as children become adults, it’s common to need to make updates to this information. You can also name secondary, or contingent, people to act in these key estate roles in case the primary is unavailable, unable, or unwilling to act in this capacity.
The same is true of healthcare directives. These give your power(s) of attorney an idea of how you’d like your care handled, in case you can’t make that decision on your own. It’s good to review your directives from time to time to ensure you 1) know what you’ve stated and 2) ensure they still honor your needs and wishes.
4. If you buy a home or make another major purchase, it might be time to revisit your legacy plan.
Legacy plans are typically written with some flexibility in terms of specific values of assets. For example, an heir typically receives a percentage of assets and not a set dollar amount. But when it comes to major assets–like real estate, recreational vehicles, or jewelry–it’s best for those items to be allocated to specific heirs to avoid tension.
5. Any other significant changes in assets might warrant a change to your legacy plan.
Did you buy or sell a large amount of stock? Did a business interest or ownership change? Give your plan a once-over from time to time to make sure there aren’t any major changes to how your assets should be named or distributed.
6. Have you had a change of heart in how you’d like your assets distributed? You can make changes to your plan any time.
Unless you’ve set up an irrevocable trust, your legacy plan can always be changed. You might decide that you want to give more to your heirs during life–so you can see them pay down their mortgage or so you can take a dream vacation together–and leave less to them through your legacy plan. Your favorite nonprofits might make significant changes, leading you to want to leave more or less to them through a bequest. Or your financial situation might change, prompting you to want to handle things differently than you did when you first set up your plan.
7. Keep an eye on tax law changes, and revisit your plan if you think they might impact you.
We’ll do the heavy lifting on this one, and we’ll post on this blog or email our followers when there’s a major change to estate taxes or legislation. But it’s always a good idea to keep an ear to the ground and ask an expert to review your plan if you believe it may be impacted.
Co-Owner and CMO
Monique has a background in ministry and higher education, bringing years of experience to the Apex Legacy Consultants team. She has degrees in journalism, Spanish, English literature/writing, and strategic leadership. She loves hearing people’s stories and figuring out ways to use creative storytelling to capture personalities, illustrate complex ideas, and inspire action.