Estate Plan Review: When and How Often You Should Update Your Plan
What Is a Periodic Estate Plan Review?
Once your estate plan is in place, one critical step remains: conducting a periodic estate plan review. An estate planning review ensures your plan still reflects your current wishes, your current circumstances, and current law.
Consider this scenario: over the past five years, you got divorced and remarried, sold your house to live on a boat, sold your business and invested the proceeds so you no longer need to work, and reconciled with an estranged daughter. That may sound extreme, but it illustrates how much can change in just a few years — before even factoring in changes to tax law, the stock market, or the broader economy.
Over time:
- Your wishes may have changed
- The advantages your plan once offered may have eroded or disappeared
- New planning opportunities may now offer better value for your estate
A regular estate plan review helps confirm your plan still aligns with your current laws and personal circumstances, giving you peace of mind.
How Often Should You Review Your Estate Plan?
Large Estates: Review Annually
If your estate exceeds the applicable exclusion amount, you should review your plan every year, in addition to reviewing after any of the life events described below. Tax laws change frequently, and staying current is essential to getting the best results for a larger estate.
Smaller Estates: Review Every Five Years
If your estate is under the applicable exclusion amount, an estate planning review every five years — or after a major life event — is generally sufficient. Smaller estates are less exposed to shifts in tax law and economic conditions, but your personal circumstances will still change over time, and a five-year review keeps your plan current.
Florida residents should also keep in mind that state-specific rules — such as those affecting homestead property, probate, or beneficiary designations — can make periodic reviews with a Florida estate planning attorney especially valuable.
When to Review Your Estate Plan: Key Triggers
Beyond the standard review schedule, certain events should prompt an immediate estate plan update.
Changes in Estate Valuation
If your estate’s value has changed by more than 20% over the past two years, it’s time to update your plan.
Economic Changes
Review your plan if there’s been a change in:
- The value of your assets
- Your income level or requirements
- Your retirement status
Changes in Occupation or Employment
If you or your spouse changed jobs, your estate plan may need revisions.
Changes in Family Situation
Update your plan if any of the following occur:
- A change in marital status (yours, your children’s, or your grandchildren’s)
- The birth or adoption of a child or grandchild
- The death of a spouse, child, or grandchild
- Illness or incapacity affecting you or a close family member
- Another individual (such as a parent) becoming dependent on you
Many states have laws that automatically revoke all or part of a will after a divorce or remarriage, making this an especially important trigger to act on.
Changes in a Closely Held Business
A review is warranted if you have:
- Formed, purchased, or sold a closely held business
- Reorganized or liquidated a closely held business
- Instituted a pension plan
- Executed a buy-sell agreement
- Deferred compensation
- Changed employee benefits
Changes Within the Estate Plan Itself
If you make a change to any part of your estate plan — such as creating a trust or executing a codicil — review the plan as a whole to make sure it remains cohesive and effective.
Major Financial Transactions
Check your plan after you have:
- Received a sizable inheritance, bequest, or similar disposition
- Made or received substantial gifts
- Borrowed or lent substantial amounts of money
- Purchased, leased, or sold material assets or investments
- Changed residences
- Changed significant property ownership
- Become involved in a lawsuit
Changes in Insurance Coverage
Any change to your life, health, disability, medical, or liability insurance — or to your beneficiary designations — can affect your estate planning needs. Let your estate planning advisor know whenever these change.
Death of a Trustee, Executor, or Guardian
If a named trustee, executor, or guardian dies or is no longer able to serve, revise the relevant sections of your plan right away.
Other Important Life Changes
Not every trigger fits neatly into a category. Use your judgment: Have your charitable intentions changed? Has a child become more financially responsible? Has your spouse’s health declined? Are your children now finished with college? Taking a little time to reflect periodically can reveal when your estate plan update is due.
Frequently Asked Questions
How often should I review my estate plan?
Large estates (over the applicable exclusion amount) should be reviewed annually. Smaller estates typically only need review every five years, or sooner if a major life event occurs.
When should I update my estate plan?
You should update your estate plan after major life events such as marriage, divorce, the birth or death of a family member, a significant change in your estate’s value, a career change, a major financial transaction, or a change in insurance coverage or beneficiary designations.
What triggers an estate plan review besides the regular schedule?
Common triggers include a 20%+ change in estate value over two years, retirement, forming or selling a business, executing a buy-sell agreement, receiving a large inheritance or gift, changing residences, or the death or incapacity of a trustee, executor, or guardian.
Why is a periodic estate plan review important?
Tax laws, personal circumstances, and financial situations change over time. A periodic review ensures your plan still reflects your current wishes and takes advantage of current laws, rather than relying on outdated assumptions.
Does divorce or remarriage affect my existing estate plan?
Yes. Many states have laws that automatically revoke all or part of a will after a divorce or remarriage, which makes reviewing your plan after either event especially important.
