Estate Plan Tune-Ups: Adapting to Life’s Changes

Steven Kriz was recently quoted in a Chicago Tribune article aimed at demystifying estate planning, where he provided insights about the documents included in a basic estate plan, how to select the right executor, and the importance of keeping documents up to date.

One of the most persistent misconceptions about estate planning is that it is a one-time event. Many clients assume that once they’ve executed their comprehensive estate plan — complete with revocable trusts, wills, powers of attorney, and sophisticated tax strategies — their work is finished. This “set it and forget it” mentality, while understandable given the complexity and emotional weight of the initial planning process, can prove problematic over time. Estate planning documents are not museum pieces to be preserved unchanged; they are living instruments that must evolve alongside your life, your family, and the ever-changing legal landscape.

Why Regular Updates Are Essential

The fundamental reason for regular estate plan updates lies in the dynamic nature of both personal circumstances and external factors that influence wealth transfer strategies. Federal and state tax laws undergo frequent modifications, with exemption amounts, tax rates, and planning opportunities shifting regularly. What constituted optimal tax planning five years ago may now expose your estate to unnecessary tax liability or fail to capitalize on new opportunities. Additionally, court decisions continuously refine the interpretation of estate planning statutes, potentially affecting the enforceability or effectiveness of existing provisions in your documents.

Life Events That Trigger Updates

Major life events should trigger a comprehensive review of your estate planning documents. Here are some life milestones that should prompt a call to your advisor:

• Marriage fundamentally alters your family structure and may require complete restructuring of your plan, particularly in blended family situations where protecting children from previous relationships becomes paramount.
• The birth of children and grandchildren necessitates updates to beneficiary designations, guardianship provisions, and distribution schedules.
• Changes in health status, whether your own or that of key beneficiaries, may require modifications to disability planning provisions, long-term care strategies, or the selection of successor trustees and agents.
• Divorce or death of beneficiaries or fiduciaries obviously warrant immediate attention to your estate documents.
• Geographic relocations also present unique challenges, as moving to a different state may subject your estate to new laws governing everything from community property rights to trust administration.
• Business ownership changes, whether through sale, acquisition, or restructuring, often require corresponding adjustments to estate plans that previously relied on business interests for liquidity or specific tax planning strategies.
• Significant changes in the composition or value of your assets may render existing distribution schemes inappropriate or inequitable among beneficiaries.

Types of Updates to Consider

A regular review of your estate plan could encompass both administrative and substantive modifications. Beneficiary designations across all accounts and policies must be reviewed and updated to reflect current intentions. Tax planning provisions should be evaluated against current law to ensure optimal efficiency and compliance. Fiduciary selections also require ongoing assessment, as the individuals you chose as trustees, executors, and agents years ago may no longer be the best choices due to changes in their circumstances, capabilities, or your relationship with them.

Distribution provisions merit particular attention, especially as beneficiaries mature and demonstrate varying levels of financial responsibility. Powers of attorney and healthcare directives should be reviewed to ensure they reflect current preferences and comply with evolving state requirements. Guardian selections for minor children must be revisited regularly, as the relatives who seemed ideal when your children were young may no longer be appropriate as circumstances change.

Sophisticated estate planning is not a destination but a journey that requires ongoing navigation and adjustment. Regular reviews ensure that your estate plan continues to serve your evolving objectives while adapting to the complex and ever-changing legal environment that governs wealth transfer.

Questions about your estate plan? Reach out to Steven Kriz or another member of LP’s Trusts & Estates group.