How often should you review your estate plan?

Most recently, I have a personal story involving my father in law that has reminded me about how important it is to review your estate plan from time to time.

An estate plan is absolutely essential for organizing your financial affairs and providing for the well being of your family.  When you start your plan, there’s a lot to think about. You want to live your life to the fullest, and ensure that your heirs will get the most out of the assets you’re setting aside for them. There are three basic documents that form the foundation of an estate plan: a Will, an Enduring Power of Attorney, and a Personal Directive.

How often should you review your plans?

People often ask if there is a set time period within which they should review their estate plan.  Should you review your estate plans including your wills power of attorney’s, and personal directives every year?  Every 3 years?  Every 5 years?  From experience, every year is probably too much: most people don’t have significant changes in their life from year to year.  The same is true for every 3 years.

However, most people will have something significant happen in their life every 5 years.  But if something significant happens in your life, then waiting 3, 4 or 5 years until you update your estate plans could be too long to wait.  Instead, its about making sure your estate planning documents are well written and flexible enough to contemplate future changes in your life.

In my opinion, when it comes to reviewing your estate plan, it’s not about reviewing it based on a certain amount of time.  Estate planning reviews should be event or circumstance based instead of time based.  Whenever something significant happens, that’s the time to revise your estate plans.  Here are some examples of events in your life that can trigger a review of not only your estate plan but also your financial plan.

  •        You get married
  •        You get separated or divorced
  •        You live in a conjugal relationship for over a year
  •        You have a child
  •        You have a grandchild
  •        You have a significant new asset
  •        You anticipate financial difficulties in the future
  •        You move to another province or country
  •        Your health deteriorates
  •        Your child gets married
  •        Your child gets separated or divorced
  •        Your spouse or your child’s health deteriorates
  •        Your spouse or your child faces financial difficulties
  •        Your spouse or your child develops an addiction (alcohol, drugs, gambling)
  •        Your spouse or child dies
  •        Your adult child become financially dependent upon you
  •        Your child no longer has any contact with you
  •        Your executor or trustee moves to another province or country
  •        Your executor or trustee becomes elderly, ill, or dies
  •        Your executor or trustee no longer has any contact with you.

Changes to your estate planning should be done with the same seriousness and professional assistance as your initial planning.  Never hand-write changes on your Will or hand-write a codicil (amendment to your Will)!

Written by Jim Yih

Jim Yih is a Fee Only Advisor, Best Selling Author, and Financial Speaker on wealth, retirement and personal finance. Currently, Jim specializes in putting Financial Education programs into the workplace. For more information you can follow him on Twitter @JimYih or visit his other websites JimYih.com and Clearpoint Benefit Solutions.

4 Responses to How often should you review your estate plan?

  1. Well put Jim. We would advise our clients to review their Will whenever their circumstances change as you have advised but also every 3-5 years to account for any legislative changes that may have occured.

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