Question: How often should I review or update my estate plan?
Answer: You should review it at least every couple of years to make sure your wishes are still the same and/or have updated it whenever you have significant changes in your life, such as purchasing a home or having children.
Lowell Lombardini-Parker over at FundAdvice.com wrote an article entitled “Who Gets Your Assets When You Are Gone?”. It is about a lady who had $500,000 in her retirement account, with her then-husband as the beneficiary. She was also helping out her two children (who were estranged from their father) with their medical school student loans to the tune of $12,000 a year from her IRA, but failed to change the beneficiary before her divorce was finalized. The lady was unexpectedly killed in a car accident, and the children had no claim to the retirement account proceeds because the father was still listed as the beneficiary. Fortunately, they reconciled with their father and the father continued to carry out their mother’s wishes with regards to the retirement account.
Though this story had a happy ending, many do not, so it is important to have your desires reflected in your estate plan and financial accounts review and updated (if necessary) periodically.
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