How Often Should You Update Your Estate Plan in North Carolina?

Creating an estate plan is an important step that allows you to control who will handle your affairs if you become incapacitated and who will receive your property after your death. Many people assume that once the documents are signed, the process is complete and they do not need to revisit it. But personal circumstances and financial situations change, and your estate plan should evolve with them.

In North Carolina, you should review your estate plan every 3 to 5 years, and after major life changes like marriage, divorce, the birth of a child, a move, or a significant change in circumstances or assets. A skilled estate planning attorney can best advise when to update an estate plan and how to ensure it reflects your current wishes.

Key Takeaways:

• Estate planning is a process, not a one-time event. As your personal and financial circumstances change, your estate plan should evolve with them.
• Review and update your estate plan every 3 to 5 years to ensure it matches your current wishes and avoids unnecessary confusion, delays, and unintended distributions.
• Update your estate plan after major life events like marriage or divorce, the birth of a child, a move to another state, a serious injury or illness, or significant changes to financial or personal circumstances.
• An estate planning attorney can review your current estate plan and recommend updates based on your current situation and circumstances.

Do You Need to Update Your Estate Plan?

Creating your estate plan is an important first step. But estate planning is a process, and your estate plan can and should evolve with you. As your circumstances change, your estate plan could become outdated. Updating it ensures your estate plan stays effective and accurately reflects your wishes.

An out-of-date estate plan can cause confusion among family members and create tax complications, delays, and unintended beneficiary distributions. Unfortunately, family members often discover estate planning documents are out of date after a loved one passes away, or when changes in circumstances make it difficult, if not impossible, to make changes.

When Should You Update Your Estate Plan?

As a general rule, you should review and update your estate plan every 3 to 5 years. You should also update it after major life events or changes in circumstances, including the following:

Marriage or Divorce

Marriage is a good time to update your estate plan by naming your new spouse as the primary beneficiary and appointing them as Power of Attorney and Medical Power of Attorney.

Similarly, divorce is another common reason to update an estate plan, as you may no longer want your ex-spouse to inherit your property or control your financial or healthcare decisions. You may consider re-evaluating your estate plan and naming a new beneficiary. Even if you still intend for your ex-spouse to inherit some of your property, you may need to update some of your estate planning documents to ensure the designation remains effective.

Birth of a Child

The birth or adoption of a child or grandchild is a great opportunity to update an estate plan. You may wish to name a child as a beneficiary of your estate and, if this is your first child, add a guardianship clause to your Will to identify who you would like to raise your child if you are unable to do so yourself.

Relocating to Another State

If you recently relocated to North Carolina or are moving away, a local attorney can review your estate plan and ensure it complies with the laws of your new state. This is also a good time to review your Power of Attorney and Medical Power of Attorney documents, as laws can differ from state to state.

Serious Illness or Disability

You should revisit your estate plan if you or your spouse is diagnosed with a serious illness or becomes disabled. While you should review all your estate planning documents, pay particular attention to your Medical Power of Attorney and health care directives, also known as a “Living Will.” Updating these documents can clarify your wishes for end-of-life care.

Changes to Family Dynamics

When events cause the breakdown of a family unit, you may consider re-evaluating your estate planning documents to ensure they reflect your current wishes.

Retirement and Changes in Personal Circumstances

Retirement and other major milestones may change your views about your estate plan. These changes are a good time to re-evaluate your objectives and ensure your estate plan continues to meet your goals.

Losing a Loved One

Losing a loved one is another reason to update an estate plan, especially if you named them as an estate beneficiary, guardian of minor children, or your financial or medical Power of Attorney.

Changes to Financial Status

Update your estate plan if you acquired significant assets after you first created it. This is also a chance to consider the tax consequences and retirement-planning implications of acquiring a significant sum of money.

Revisit Your Estate Plan Every 3 to 5 Years

Even if you have not experienced any of these significant life changes, we recommend reviewing your estate plan at least every 3 to 5 years. A trained attorney can assist with this process, as the tax code or other laws may have changed in ways that could affect you.

How a North Carolina Estate Planning Attorney Can Help

When reviewing your estate plan, gather all of the relevant documents and review them carefully. Review who you have named as your estate executor and, if you have a trust, trustee. Ensure your Power of Attorney and Medical Power of Attorney name trusted individuals you are comfortable making decisions for you. If you have young children, ensure your choice of legal guardian is up to date.

Comprehensive Estate Planning for North Carolina Families

Reviewing your estate plan can feel overwhelming, but working with the right attorney can make all the difference. The estate planning attorney team at Carolina Tax, Trusts & Estates, a Department of Van Camp, Meacham & Newman, PLLC, helps North Carolina families by creating customized estate plans that protect their financial future and well-being. Call 910-725-0498 or contact us today to schedule a confidential consultation to discuss your situation and how we can assist you.