Your estate plan is not a set-it-and-forget-it paper. Life changes, and your plan needs to change with it. Many families create a plan and then put it in a drawer for years. By the time someone needs it, the plan no longer fits their current life. Regular reviews help you catch gaps before they become problems for your family.
The Annual Estate Plan Checkup
At minimum, review your estate plan once a year. Tax season is a natural time to do this. You are already gathering money papers. During your yearly review, check three things:
- Trust funding: Are all your current assets titled in your trust? New bank accounts, investment accounts, or real estate bought during the year may need to be moved into your trust. For a step-by-step guide, read our article on how to fund your trust in Arizona.
- Beneficiary forms: Do all your retirement accounts, life insurance policies, and payable-on-death accounts name the right people or your trust? These accounts pass outside of your will and trust. Keeping them current is critical.
- Named people: Do the people you chose as trustees, agents, guardians, and loved ones still make sense? Health and life changes over time.
A 15-minute yearly review can save your family months of legal trouble and thousands of dollars in extra costs.
Life Events That Should Trigger a Review Right Away
Beyond the yearly checkup, certain life events should prompt you to review your plan right away. These are the most common triggers:
- Marriage or divorce: A new marriage means updating who inherits and who makes choices for you. After a divorce, you almost always need to remove your former spouse from your trust, will, power of attorney, and beneficiary forms.
- Birth or adoption of a child or grandchild: New family members may need to be added to your plan. This is also the time to name or update guardians for minor children.
- Death of a trustee or named loved one: If someone you named in your plan passes away, you need to pick a replacement. Not doing so can leave key roles empty.
- Buying or selling property: Real estate deals often mean updating your trust. In Arizona, you may also want to look into a beneficiary deed for property not in your trust. Learn more in our article on beneficiary deeds vs. trusts.
- Moving to Arizona from another state: Arizona is a community property state. Its laws around trusts, wills, powers of attorney, and probate differ from many other states. A plan drafted elsewhere may not fully follow Arizona law.
- Big change in assets: An inheritance, business sale, large gift, or major investment may change the scope of your plan. You may need new payout instructions.
- Health changes: A serious diagnosis may lead you to review your healthcare directives, long-term care plans, and who you named as your healthcare agent.
Why Retirement Is a Key Time to Review
Retirement brings a wave of money changes that directly affect your estate plan. You may roll over old 401(k) accounts into IRAs, start drawing Social Security, adjust your insurance, or downsize your home. Each of these can create gaps if your plan is not updated.
For retirement accounts, beneficiary forms are the single most vital detail to get right. These accounts pass by the named person on the form, not by your will or trust. If you roll over an account and forget to update the form, the wrong person could inherit. To learn more, see our article on whether your trust should be the beneficiary of your IRA or 401(k).
What Happens If You Do Not Update Your Plan
An outdated plan can be worse than no plan at all. Here are real cases we see often:
- An ex-spouse is still listed on a life insurance policy or retirement account and inherits everything
- A successor trustee named 15 years ago is no longer willing or able to serve
- A new home was never moved into the trust, so it goes through probate
- A child was born after the trust was created and is not in the payout plan
These are not rare cases. They happen every day. And they are almost always avoidable with a regular review.
At RJP Estate Planning, we suggest a brief check-in with your attorney at least once a year. If you have gone through any of the life events listed above, reach out sooner. A small amount of time now guards your family from major problems later.