Free Guide: When to Review Your Estate Plan

Why Your Estate Plan Needs Regular Review

An estate plan is a collection of legal documents that direct what happens to your money, property, and personal belongings after you pass away. It typically includes a will, any trusts you've created, beneficiary designations on accounts, and healthcare directives. Many people create an estate plan once and then forget about it for years or even decades. However, life changes constantly, and your estate plan should reflect those changes.

According to a 2023 survey by Caring.com, only 32% of American adults have a will or other estate planning document. Of those who do have documents, many haven't reviewed them in 5 or more years. This can create serious problems for your family. If your documents don't match your current situation, they may not work the way you intend. Your wishes might not be honored, or your family could face confusion and conflict during an already difficult time.

Regular review of your estate plan ensures that it remains aligned with your values, your financial situation, and your family circumstances. Think of it like maintaining a house—you wouldn't paint it once and never touch it again. You'd inspect it, repair damage, and update it as needed. Your estate plan deserves the same attention.

The cost of not reviewing your plan can be significant. Outdated documents might name people you no longer want in those roles, fail to account for new children or grandchildren, or direct assets to organizations you no longer support. In some cases, unclear or conflicting documents can lead to legal disputes that drain your estate of money that should go to your heirs.

Practical Takeaway: Schedule a review of your estate plan at least every 3 to 5 years, or whenever a major life event occurs. Mark it on your calendar now, just as you would for a dental checkup or car maintenance.

Major Life Events That Require Estate Plan Updates

Certain life events should trigger an immediate review of your estate plan, even if you've recently updated it. Marriage is one of the most significant. When you marry, your spouse may automatically have certain legal rights to your estate depending on your state's laws. However, relying on default rules is risky. You should update your will, create or modify trusts, review beneficiary designations, and potentially create a marital property agreement if you have children from previous relationships or significant separate property.

The birth or adoption of a child is another critical event. Many parents don't realize that if they die without updating their will, their new child may not inherit automatically. State intestacy laws (the rules that apply when someone dies without a will) don't always distribute property the way you'd want. Additionally, you need to name a guardian for minor children in your will. Without a guardianship designation, the court will choose who raises your children if both parents pass away.

Divorce is equally important. In some states, a divorce automatically revokes provisions in your will that benefit your ex-spouse. In others, it doesn't. Either way, you'll likely want to update beneficiary designations on life insurance policies, retirement accounts, and other assets. If you have a trust, you may need to update it as well. Failing to update these documents can result in your ex-spouse receiving assets you never intended them to have.

Other significant events include the death of a family member, a substantial change in your financial situation (inheritance, business sale, significant losses), health problems affecting your ability to make decisions, changes in tax laws, relocation to a different state, and changes in your relationships with people you've named in your documents.

Even positive changes warrant review. If your career advances significantly, your estate plan designed when you had fewer assets may not adequately address tax planning strategies that could save your heirs money. If you've paid off a mortgage or sold a business, your financial picture has changed enough to review whether your current plan still makes sense.

Practical Takeaway: Keep a running list of life events and create a simple document titled "Estate Plan Update Triggers" that you review whenever something significant happens in your life. This helps you recognize when it's time to meet with an attorney.

Understanding Beneficiary Designations and Why They Matter

Beneficiary designations are instructions about who receives specific accounts or assets when you die. They appear on life insurance policies, retirement accounts (like 401(k)s and IRAs), bank accounts set up as "payable on death," and brokerage accounts. These designations are powerful because they override what your will says. If your will directs your IRA to your children equally, but your IRA's beneficiary designation names only one child, that one child gets the IRA regardless of what your will says.

A common problem occurs when beneficiary designations become outdated. Someone goes through a divorce and forgets to update beneficiary forms. Years later, they've remarried and want their new spouse to receive their 401(k), but their ex-spouse is still listed. Or a parent names their children as beneficiaries on a life insurance policy, but after having more children, fails to update the form. The newer children receive nothing from that policy.

Another frequent issue involves naming a minor child as a direct beneficiary. If a young child is named as the beneficiary on a $250,000 life insurance policy and the insured parent dies, the insurance company generally won't give the money directly to the child. Instead, the court may appoint a conservator to manage the funds until the child reaches age 18 or 21. This creates expenses, delays, and loss of privacy. A better approach might be to name a trust as the beneficiary, which can hold funds and distribute them according to your instructions.

Many people also don't realize that beneficiary designations on retirement accounts have special tax rules. If you name your spouse as beneficiary on an IRA, they have options for managing inherited IRAs that other beneficiaries don't have. If you name a non-spouse, different rules apply. If you name your estate as beneficiary, you lose advantageous tax treatment. These rules changed significantly in 2020 with the SECURE Act, and they changed again in 2023 with the SECURE 2.0 Act. If you haven't reviewed your retirement account beneficiaries since 2019 or earlier, you may be missing opportunities to reduce taxes for your heirs.

Practical Takeaway: Gather statements from all financial institutions where you hold accounts and look for beneficiary designation forms. Make a list of who is currently named as beneficiary on each account. Compare this list against your overall estate plan to ensure everything aligns with your wishes.

How Your Estate Plan Changes With Age and Changing Circumstances

Your needs and priorities naturally shift as you age. In your 30s and 40s, you might be focused on protecting young children and providing for a spouse. Your estate plan likely emphasizes guardianship designations and life insurance to replace lost income. By your 50s and 60s, your children may be adults, and your focus shifts to managing a larger estate, minimizing taxes, and planning for potential long-term care needs.

Health changes are particularly important. If you develop a chronic illness or memory-related condition, you may need to update or create healthcare directives and powers of attorney while you're still able to make these decisions. A healthcare directive (also called a living will or advance directive) tells doctors and family members what kind of medical care you want if you can't communicate. A durable power of attorney for healthcare designates someone to make medical decisions for you. These documents become increasingly important as you age, even if your financial estate plan hasn't changed much.

Your relationship with people you've named in your documents may also change. Perhaps you named your brother as executor (the person who manages your estate after you die), but you've become estranged. Or you named your oldest child as trustee, but they've moved overseas or shown poor financial judgment. Or you designated your best friend as healthcare agent, but you've moved to a different city and rarely see them anymore. These changes deserve consideration—you want people in these roles who are willing and able to serve, and whom you trust.

Changes in your state's laws also matter. Tax laws change regularly at both federal and state levels. Some strategies that made sense five years ago may be less beneficial now. Additionally, if you move to a different state, your estate plan may need adjustments. Some states treat property differently, have different requirements for valid wills, and have different rules about trusts. A will that's valid in your old state might be valid in your new state too, but a trust or other documents might need updating to work well with your new state's