As Virginia residents know, death is a part of life that everyone must deal with at some point. After death, everyone has an estate that loved ones must manage. Having an effective estate plan can aid family and friends when the time comes.
It is important to set up an estate plan early, but many events can occur that will change family circumstances over the course of someone’s life. Therefore, it is also important to periodically review the estate plan to ensure that wishes will still be carried out.
How often an estate plan should be reviewed depends on both the size of the estate and events that can occur in someone’s life. A large estate should be reviewed every year and after any significant life event. One reason for this is that estate tax laws can change every year and significantly affect the distribution of the estate.
A smaller estate should be reviewed at least every five years and after any significant life event. Tax laws do not have as big of an impact on the distribution of smaller estates, as they do with larger estates.
Estate plans should also be reviewed after common life events, including changes in:
• Estate valuation
• Family situation
• Business interests
• Intent for distribution of the estate
The estate plan should cover the intention for distributing not only property but also assets, such as family heirlooms.
The plan should also address what will happen in the event of an emergency or illness, such as how medical bills for a serious illness should be covered It is best to not only review and change the estate plan but also to discuss the intentions with family to make sure that those intentions are carried out.
Source: The PNC Financial Services Group, Inc., “Conducting a Periodic Review of Your Estate Plan”