There is no hard and fast rule as to how frequently people should update their advance directives (powers of attorney and trusts) and estate planning (wills and trusts) documents. Instead of a set number of years, five circumstances should trigger re-evaluation of estate planning with your accountant, investment adviser, attorney and insurance agent.
First, give attention if there is a change in the life of someone who is or may become your agent under a power of attorney, executor or trustee. For example, an adult child who is listed as an agent to make healthcare decisions for you may himself or herself have medical conditions of their own that would make potential, additional decision-making extra burdensome.
Similarly, if an oldest child reaches adulthood, it can be a good time to update documents to include that oldest child as guardian of the other children or as your agent, executor or trustee.
Second, give attention when there is a life change for you or a family member of yours. A marriage, divorce, illness, diagnosis, loss of job or promotion at work can all make estate plan fine-tuning extra important.
Third, give attention when the law changes. Many people think that their attorneys, accountants, insurance agents and investment advisers will personally call or message whenever any change in the law may affect their clients. However, often the best to expect is to receive every so often a generic newsletter or pamphlet identifying some potentially relevant changes.
Of course, it would be logical for the above-mentioned professionals to want to personally initiate contact with you personally when (external to you) changes may affect you. This is not always workable for two reasons.
Initially, your accountant, attorney, insurance agent and investment adviser may have thousands of clients. Although software can help keep monitor which clients may be affected by a change in the law, research hints that most professionals in these fields can only mentally give attention to only about 100 client matters at one time. Therefore, helping your professional adviser “cue up” your work when you learn of a law change from this publication or other media, can ensure that you receive the attention you need when you need it.
Secondarily, many malpractice insurers, of attorneys for example, require that client interactions be defined by “project” or “task,” so that the understandable unwieldiness of having to monitor every law change’s impact on every client’s life at any given time (a practical impossibility) is not a responsibility for which a failure to contact a client gives rise to a malpractice claim.
Fourth, anticipation of retirement should trigger attention. Retirement changes taxes and legal opportunities and responsibilities. This is also when many people begin to seriously consider the need for long term care (nursing home).
Fifth, when you desire to give to your church or a charity, it is important to determine how best to give within your estate plan to minimize taxes and other expenses to maximize the value of the gift to the receiver.
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.