When to Update Your Estate Plan
You did it! You completed your estate plan. Now that you have your plan in place, is it safe to mentally file it under “things I don’t need to worry about”?
How often should you update your estate plan? Jen Hallos, a Principal in our Trust & Estates and Taxation practice groups, recommends that, outside of certain events, clients should generally review their plan every four to five years. This review should occur more frequently for high-net-worth individuals. But this does not mean you repeat the entire process every handful of years. Having a foundation for your estate plan ensures that most future changes will require minimum attention.
Every several years, Jen sends a summary to her clients that details their current plan. At that time, she lets them know what has changed in the law since the plan was last updated, and she informs them if those changes have affected their plan. Additionally, she inquires about significant life changes that should be reflected in their plan. Some life changes will require more immediate attention than every four to five years.
Examples of life changes that should be reported upon their happening include the birth of a child, a divorce, a notable income event, the death of an individual listed in the plan, or the start of a new business, to name a few. In order to properly protect the assets of the client, these events should be accounted for in a timely manner.
Clients often ask whether an out-of-state move invalidates their Ohio based estate plan. The short answer is no, but Jen suggests that just because relocating doesn’t invalidate the document, doesn’t mean you shouldn’t update your plan. The Full Faith and Credit Act essentially says that states will honor the laws of other states as long as the documents were completed in accordance with the law of the state in which the document was created. However, depending on where the individual moves, an update to their plan could be as simple as adding an amendment that says the document is now governed by the state law of the new residence. Consulting with your attorney regarding your change in address can be beneficial in case there are laws to be aware of in your new state. For example, some states have a state estate tax. Ohio does not have this tax, but the state you are moving to might, and you want to be sure that your plan provides for the managing of that.
Overall, not changing your plan to reflect life events, such as moving out of state or experiencing an income event, will not invalidate the document. However, without updating it, the document may no longer service you in your best interest based on the laws of your new state or in consideration of your new situation.
Please reach out to request a consultation, give us a call at 216-696-1422, or visit Jen’s bio for her contact information to reach out to her directly.
