Estate planning is not a process that is done once and then forgotten until the owner of the estate passes away. Good estate planning is a fluid and dynamic process that needs annual attention to stay relevant. There are various aspects of your estate planning structure you should question every year, and have your estate planning expert alter based on your changing needs.
When you have your estate put together by a professional, tax laws and other administrative considerations are always part of the equation. The problem is that you never know when it is your time to pass onto the next plane of existence, and that means that your estate always needs to be current when it comes to those administrative considerations.
At least once a year, you need to have your estate planner review your plan and make sure that any changes in the tax or estate planning laws are taken into consideration. You want your estate planning to yield certain results, and you need to make sure it is relevant in terms of current laws to get those results.
If your estate executor or trustee passes away during the year, then that could cause your estate problems if you pass away without making the necessary changes. If you have a falling out with one of your beneficiaries and do not want them to benefit from your estate, then you need to remove them before something happens to you. Each year, you need to review all of the names you have set up in your estate to ensure that your estate is administered as you want it to be after you pass on.
Believe it or not, there can be law changes that would challenge the power of attorney you have in effect in your estate should you pass on. Any of your power of attorney or health proxy designations need to be reviewed annually to make sure that you are giving the right people the administrative power you want them to have.
A year is a long time, and a lot can change in those 12 months that would affect your estate. Once a year, you should sit down and review all of your insurance policies and make sure your coverage is adequate and your beneficiaries are correct. If you took on a few valuable family heirlooms over the course of the year, then you may need to alter your homeowners insurance to protect those heirlooms in the event of fire or theft.
Whether you have an estate plan in effect or not, it is critically important to review all of your investments and make sure you are getting the performance you are expecting. Sit down with your financial adviser and discuss changes that could improve your portfolio.
If you took on new property of any kind during the year and that property is not part of your trust, then you should move ownership of that property into your trust to make sure it is protected.
An annual estate plan evaluation is always a good idea to prevent your estate from going to people you don't want it going to, and to make sure that it is still structured properly to get the results you want.