When Should You Update Your Estate Plan?
Planning for the future is one of the most important things you can do for yourself and your loved ones. A well-drafted estate plan can provide peace of mind, help distribute your assets according to your wishes, and make a difficult time a little easier for your family. But an estate plan isn’t a one-and-done project.
Knowing when to revisit your estate plan can make all the difference; keeping your estate planning documents up-to-date helps make sure your wishes are honored.
At Alexander Grossman Attorneys at Law, we combine experience and a commitment to personalized service for our clients. Our experienced attorneys will work closely with you from start to finish, taking the time to understand your goals and concerns. For over 45 years, our team has served Skokie, Illinois, including Cook County, Lake County, Lincolnwood, Morton Grove, Evanston, Glenview, Wilmette, and Niles.
So, how do you know it's time to update your estate plan?
Major Life Events
Life has a way of throwing us curveballs, both joyful and challenging. When your personal circumstances shift in significant ways, it often means your estate plan should too. These events can change your priorities or the people you want to include in your plan.
Here are some major life events that might call for an estate plan update:
Marriage or divorce: Getting married means adding a spouse to your plan. Divorce, however, often means removing an ex-spouse from documents like wills, trusts, and powers of attorney.
Birth or adoption of a child: Growing your family is a major reason to revisit your estate plan. You'll want to name guardians, provide for your child financially, and maybe set up a trust.
Death of a beneficiary or executor: If someone named in your plan passes away, it’s important to update your documents to reflect a new choice.
Blended families: Remarrying or combining households with stepchildren often changes your wishes and goals, especially when it comes to how you divide your assets.
Serious illness or disability: Health issues can impact who you want to make decisions on your behalf, or how you want your care handled.
Changes in Financial Situation
As your financial picture changes, so should your estate planning strategy. A plan you created when you had fewer assets may not work well when your wealth grows or you experience a financial setback.
Consider updating your estate plan when any of the following happens:
Acquiring significant assets: Buying a home, receiving an inheritance, or building a successful business can all affect how you want your estate to be distributed.
Starting or selling a business: A business is a significant asset that requires careful planning. If you start or exit one, your estate plan should reflect what happens to it.
Retirement: As you shift from earning to drawing from your savings, it’s a good time to review how your assets are structured and who benefits from them.
Debt changes: Taking on major debt or becoming debt-free can affect how much you leave behind and how it gets divided.
Moving to a New State
Laws that affect estate planning vary from state to state. If you’ve recently moved to Illinois or plan to, have your plan reviewed by an estate planning attorney familiar with Illinois law.
Here’s why moving might prompt an update:
Different rules on wills and trusts: Some states have different signing requirements or legal interpretations.
Tax differences: State estate or inheritance taxes can vary widely; Illinois has its own estate tax rules.
New property ownership: If you've bought a home or land in your new state, your plan should reflect how that property is handled.
Changes in Relationships
Not all relationship changes are as significant as marriage or divorce, but they can still impact your estate plan. As life goes on, your feelings toward friends, family, or trusted advisors might shift.
Consider updating your documents if:
Your relationship with a beneficiary changes: You may no longer want someone to inherit from you, or you might want to add someone new.
You want to name new fiduciaries: Executors, trustees, and powers of attorney should always be people you trust. If that trust changes, so should your plan.
Estrangement or reconciliation happens: A falling out or reunion with a loved one might make you rethink how they fit into your estate plan.
Changes in tax codes and estate laws should also lead to updating your estate plan.
Legal or Tax Law Updates
Tax codes and estate laws can change; when they do, your current plan may no longer align with your needs or fully leverage the benefits of the law. Federal and state updates can both affect your strategy.
Stay alert for these legal reasons to update your estate plan:
Changes in federal estate tax exemption: The amount you can leave tax-free changes over time. If it drops, your plan may need adjusting.
New rules around retirement accounts: Laws like the SECURE Act changed how inherited IRAs work, which could affect your beneficiaries.
Changes in Illinois estate tax law: Illinois has its thresholds and requirements that may impact your estate planning goals.
Regular Reviews
Even if nothing major has happened, it’s still smart to regularly review your estate plan. Time alone can make parts of your plan outdated or impractical.
Keep your plan fresh by reviewing it regularly:
Every three to five years: A general review every few years helps you weed out outdated information, like addresses or account numbers.
With your attorney present: A professional eye can spot things you might miss or suggest opportunities to improve your plan.
After major changes in the law: If you hear about legal changes in the news, that’s a great reminder to revisit your documents.
Transitioning From One Life Stage to Another
As you move through different stages of life, your priorities naturally shift. What made sense in your 30s may no longer apply in your 60s. From young adult to retiree, your estate plan should evolve along with you.
Key moments that signal a shift in life stage:
Becoming an empty nester: When the kids leave home, your focus might turn more toward legacy and retirement.
Turning 50 or 60: These milestone birthdays often spark financial reviews that should include estate planning.
End-of-life planning: As you age, you may want to fine-tune how your plan handles medical care, funeral wishes, or final gifts to loved ones or charities.
Recognizing these shifts in life stage is an important reason to update your estate plan. These moments often bring new clarity about what matters most; your plan should reflect that clarity.
Reach Out Today
Keeping your estate plan updated is one of the most thoughtful things you can do for your future and your family. If it’s been a while since you looked at your estate plan, or if any of the situations above sound familiar, it might be time to talk to our experienced estate planning attorneys at Alexander Grossman Attorneys at Law and bring your plan up to date. Our firm serves Skokie, Illinois, and surrounding areas, including Cook County, Lake County, Lincolnwood, Morton Grove, Evanston, Glenview, Wilmette, and Niles. Call today to schedule a consultation.