Good Reasons to Review Your Estate Plan

If you have a will or trust, congratulations. But you're not done.

- SANDRA BLOCK

Hardly a week goes by without news of a celebrity who died without a will, fracturing families and enriching their attorneys. Maybe you’re smarter than that. You have a will and have named a power of attorney for finances and health care. But unless you regularly update these documents and beneficiary designations, your heirs could still find themselves in a legal morass after you die. Worse, some of your assets could end up going to a wrongful heir.

The basic components of an estate plan include a will or living trust (or both), a living will, and a power of attorney for finances and health care (also known as a health care proxy). POA designations give an individual you trust the authority to manage your finances or make health care decisions in the event that you become incapacitated. You can also use a power of attorney to designate an individual to manage your digital assets, such as your online and social media accounts.

Some individuals use living trusts to avoid probate and designate a trustee to manage their assets after they die (see “The Lowdown on Living Trusts,” May). But whether your estate is simple or multi-layered, you should review all of your documents every three to five years, or more often if you experience a major life change, says Marcos Segrera, a financial adviser with Evensky & Katz, in Miami. We’ve provided a checklist on the facing page that you can use to determine whether you may need to update your estate plan.

YOUR BENEFICIARIES

Certain assets, such as your retirement accounts and insurance policies, require you to name a beneficiary who will inherit the account when you die. That ensures those assets will go directly to your beneficiaries after you die, outside of probate.