True estate planning is never a “set it and forget it” type of endeavor. The most successful estate plans are continuously reviewed and revisited as the years pass and circumstances change. New tax or other laws, life changes, and growing, shrinking, or changing assets can all create a need for an update. Another important reason to modify your plan is to correct mistakes that are uncovered later. Engaging in a regular review of your plan will help to ensure that these mistakes are caught in time to be fixed.
Five Reasons Why Estate Planning Updates Are Important
While mistakes can and do happen when creating an estate plan, a modification can correct these errors. Failing to take the time to review and update your estate plan could result in a mistake that dramatically impacts the overall success of your plan. Possible negative outcomes from failing to update a plan to correct a mistake may include the following:
- Your assets may be distributed to the wrong beneficiaries.
- Your estate may be subject to estate, capital gains, or income taxes that could have been avoided with an update to your estate plan.
- You may have individuals serving as your trustee or personal representative that you did not intend to fill these roles.
- You may be exposing yourself to unnecessary liability, if, for example, you simply added a child to the deed on your home in order to avoid probate.
- Your loved ones may have to conduct a probate administration of your estate if you did not update your plan to avoid it.
Fortunately, updating an estate plan to correct any mistakes is not difficult. Our free guide, The Ten Things You Must Know Before Creating (Or Amending) Your Will or Trust, provides a helpful overview of this process. This pamphlet offers an easy to understand and informative overview for those considering an update to a will or a trust. We encourage you to review it today.