08 Jun The Best Time to Update Your Estate Plan

In some of our recent blog posts at Phelps LaClair we have been writing about celebrities who have died without a will or trust in place. In most cases, the lack of planning comes down to procrastination. But even for folks who do have an estate plan in place, procrastination can cause some major headaches. Life changes happen frequently, our situations are in flux, and we get caught up in the moment, forgetting that life is a marathon, not a sprint. With all the changes in family, business, and finances, you need to consider: When is the best time to update your estate plan? Let’s look at some real-life scenarios.

Deathbed promises

When someone makes promises on their deathbed, even in the presence of witnesses, the question is asked whether those promises are legal and binding. We can’t answer for every case, but we can say the best answer is a definite “Maybe.” In situations like these, the estate claims of deathbed promises will end up in probate. Only a judge can decide what is valid and what lacks standing in a court of law. Updating an estate plan on the deathbed is, at best, going to cost the estate time and money—and may become an “update failure”.

Handwritten changes

As the Aretha Franklin estate probate case illustrates, handwritten wills or handwritten changes to a will or trust will probably be brought before a court. The validity of the will and any changes that were made will be determined by the probate judge. Unfortunately, in some cases it is possible that legitimate heirs will be left out and dubious claims will be recognized. In all cases, the added expense of lawyers and court fees will reduce the value of the estate. This is another update failure that can be avoided.

Family situations

When there are certain changes in family relationships, it is important to update an estate plan ASAP. When a child is born or a parent dies, the estate plan must take that into account. If a successor trustee or named guardian dies, it is important not to delay an estate plan update. If there is a divorce, the estate plan must be rewritten or revised in order to reflect the settlement and to protect the inheritance. Failure to update after a divorce is the leading cause of the loss of an estate.

Asset valuation

The value of assets can rise and fall dramatically, especially in volatile economic times. Retirement accounts and pensions are dependent on stock and bond markets, which are seldom static. Real estate values are sometimes rising, sometimes falling. Investment portfolios, even in diversified mutual funds, are subject to Wall Street fears and the risk/reward ratios. Without smart periodic updates, an estate plan could stand to lose a lot of value: another update failure.

Career changes

If you change careers or even career goals, you need to visit your estate plan for possible revision. Even a promotion would warrant an update. The same holds true if you acquire or divest a business interest. Anytime your financial situation changes, it is time to see your estate planning attorney.

At Phelps LaClair, we value our clients. That’s why we have been in business for almost 40 years, helping people with their estate plans. One thing we stress regularly is the awareness of when it is time to update your estate plan. It is seldom too early; it is sometimes too late. Don’t be caught letting time slip away: call us for an appointment to update your estate plan. If you are a first-time client with us, your consultation is free. We are here to help you make the most of your estate so you can leave a legacy for those you will leave behind.

Images used under creative commons license (Commerical Use) 06/08/19  Photo by Shopify Partners from Burst