Estate planning is not a "set it and forget it" process, or at least it shouldn't be. Even with the best of planning, circumstances change and a review of an individual's situation and estate planning is advisable. The following is a (non-exclusive) list of life and business events that should trigger a review of an estate plan and applicable estate planning documents, or at least a consultation with one's estate planner:
- Birth of a child or grandchild;
- Marriage of self or heir;
- Death of a spouse or child;
- Major change in the tax laws;
- Major change in financial circumstances, such as a substantial inheritance;
- Change of domicile to a new state or country;
- Acquisition of out-of-state or out-of-country property;
- Major illness;
- Acquisition or sale of a business or real estate, including major liquidity events;
- Major charitable gifting;
- Acquisition of life insurance or significant annuity policies;
- Significant gifting to friends or family members;
- Or in the absence of any of the above, the passage of 4-5 years since the last review.
Ideally, clients should consult with their professionals BEFORE some of these events occur so as to allow for effective tax planning when income or transfer taxes are involved.
A suggestion for estate planners is to provide a listing of these events to their clients at the completion of the planning process to help educate them about when to have their estate planning reviewed. A memo to be kept with the client's set of estate planning documents is an easy way to accomplish this.