How Often Should I Update my Estate Planning Documents?

 After going to the time and expense of setting up an estate plan, people often put their important documents on a shelf and forget about them. How often should you dust off these documents and revisit these important life decisions?
As a general rule, family changes and changes in financial situations should prompt a review of documents to make sure they are current.
People Changes. Changes in families account for the most frequent amendments to estate planning documents. A death of a successor trustee, a divorce, the addition of a child to the family either naturally or by adoption, require an update of estate planning documents to make sure they are reflective of current family situations.
Parents may have also prepared estate planning documents when children were minors, giving decision making responsibility to other family members. Those same children, as adults, may now be able to make financial or health decisions for parents as successor trustees, executors, and health care agents. Guardians, executors and trustees may also need to be changed if they no longer have a close relationship with the family or have moved away.
Financial Changes. As of January 1, 2013, the federal estate tax exemption was set at $5 million. If estate planning documents were originally prepared with estate tax savings provisions people may opt for a simplified trust if their estate is now below the estate tax exemption. On the other hand, if an estate has gone up in value significantly since estate planning documents were first prepared, there may be a need for an amendment to add estate tax savings devices to a trust.
If a revocable living trust was prepared as part of an estate plan and there have been many changes in a financial situation, assets may need to be updated to reflect ownership by a trust or to update beneficiaries.
If you would like to update your estate planning documents or have questions regarding amendments to a current estate plan, please call Bill Keller or Jennifer Keller of the Keller Law Firm at 661-291-1631.