Hopefully, you already have a sound estate plan in place to protect the interests of your heirs and minimize potential estate tax liability. But that doesn’t mean you’re completely in the clear. You can’t just fill out the paperwork, lock up the documents in a file cabinet or store them electronically, and forget about it. Reviewing your estate plan is just as important as creating one in the first place. Consider your estate plan to be a “work in progress.”

Notably, your circumstances could be affected by certain life events that must be reflected in your estate plan. Additionally, the plan must be reviewed periodically to ensure that it still meets your main objectives and is up to date. Although you can examine the plan whenever you choose, the end of the year and the start of a new year is often an opportune time for individuals to take stock of their situations.

Reflect life-changing events

What sort of life events might require you to update or modify estate planning documents? The following list isn’t all-inclusive by any means, but it can give you a good idea of when changes may be required:

• Your divorce or remarriage
• The birth or adoption of a child or grandchild
• The death of a spouse or another family member
• The illness or disability of you, your spouse or another family member
• When a child or grandchild reaches the age of majority
• When a child or grandchild has education funding needs
• Changes in long-term care insurance coverage
• Taking out a large loan or incurring other debt
• Sizable changes in the value of your assets
• Sale or purchase of a principal residence or second home
• Your retirement or the retirement of your spouse
• Receipt of a large gift or inheritance
• Sale of a business interest
• Changes in federal or state income tax or estate tax laws

As part of your estate plan review, examine the critical components — including the key legal documents incorporated within the plan. Also, consider the 2022 cost-of-living adjustments and your year-end tax planning.

Update your letter of instruction

As you review your estate plan, be sure to reread your letter of instruction and make any necessary revisions. Although a letter of instruction isn’t legally binding, it can be incredibly useful.

The letter may provide an inventory and location of assets; account numbers for securities, retirement plans, IRAs and insurance policies; and a list of professional contacts that can help your heirs after your death. The letter can also state personal preferences, such as specifics for funeral arrangements.

Reviewing your estate plan

Don’t put off your estate plan review any longer. Identify any changes and arrange to have the necessary adjustments made soon after 2022 arrives, if not sooner. We can help you complete your review and make any needed updates. Contact our RRBB accountants and advisors today!

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