Madison Eubanks

Feb 21, 2025

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Why You Need to Periodically Update Your Estate Plan (and the Risks of Not Doing So)

Going to the dentist, getting an oil change, getting a flu shot, cleaning out the gutters, taking your pet to its annual vet appointment—these aren’t things that most people look forward to doing, but they’re all regular maintenance tasks that we do throughout the year. 

And while no one wants to add yet another item to life’s list of chores, estate planning updates deserve a place on the docket. This doesn’t need to be done every year, but ongoing maintenance is crucial for an optimized plan. 

In this article, we’ll discuss why updating an estate plan is important, how often to update an estate plan, how advisors can help keep estate planning on track, and more. 

Why periodic estate plan updates are essential

It’s a common misconception that estate plans are a one-time thing. You sit down with an advisor, set up some trusts, sign some documents, and then never think about it again. Right? 

Wrong. 

While you don’t need to think about your estate plan every day or even update it every year, it’s important to revisit it at regular intervals to ensure it still aligns with your wishes, values, family situation, and financial circumstances. 

Family dynamics often change over time. Marriages, divorces, births, and deaths are all part of a family’s evolution over time, and estate planning should reflect these shifts to ensure designated beneficiaries are still alive and the intended recipients of the estate owner 

This also goes for executors and other fiduciaries—these people are charged with carrying out the estate owner’s wishes, so it’s important to ensure that the executor and fiduciaries are not deceased, incapacitated, or out of touch with the estate owner. 

Additionally, people’s financial situations and assets can change as well. You may acquire or sell property, receive a windfall, get or lose a job, start or sell a business, or any number of other events that can change finances. 

Lastly, changes in estate laws and tax regulations can warrant updates to ensure an estate plan remains optimized. These can come from changes in administration, adjustments from inflation, economic conditions, and more. 

Periodically reviewing an estate plan to ensure beneficiary designations, appointed executors, financial considerations, and tax minimization strategies are up to date is one of the best ways to ensure smooth asset transitions for family and loved ones. 

How often should you update your estate plan?

Every individual’s plan is different, and there’s no hard and fast rule to set your clock by for revisiting an estate plan. However, good general guidance is to review your plan every three to five years, or when any major life event happens. 

Events that may require changes to your estate plan include: 

• Getting married
• Getting divorced
• The birth or adoption of a child or grandchild
• The death of a beneficiary or executor
• Significant changes in net worth or assets
• Changes in estate tax laws or other financial regulations (which often occur with changes in the presidential administration)
• Moving to a different state or country
• Retirement or other major career shifts

Taking a look at your plan following any of these events is a great way to ensure it aligns with your family circumstances and is optimized for taxes. 

Consequences of not updating an estate plan

There can be many unintended consequences of dying with an outdated estate plan, the burden of which will fall to family and loved ones.

Any number of complications can arise from an outdated plan, but here are four of the most common drawbacks: 

Unintended beneficiaries 

If a plan isn’t updated, assets may end up in the hands of beneficiaries who the estate owner didn’t intend as heirs. For instance, say an adult son becomes estranged from his parents, but the parents never update their estate plan to exclude him. When they pass away, the son will inherit whatever they had originally designated to him, despite what they may have intended after their falling out. 

Potential tax burdens

When a plan isn’t based on the most current estate and tax laws, it can be subject to unexpected taxes. Not only does navigating potential tax implications fall to the decedent’s surviving loved ones, it can reduce the amount that’s passed on to beneficiaries. 

Family disputes and legal battles

Estate distribution can be messy—especially if an estate plan is outdated or nonexistent. Unfortunately, many people who are the recipients of assets (or feel they should be the recipient of assets) find themselves in bitter conflicts with other beneficiaries or family members. Outdated documents can also lengthen or complicate the probate process, which can be stressful and costly for families. 

Loss of control over medical or financial decisions

Failure to update healthcare or financial powers of attorney can lead to outcomes that an estate owner wouldn’t have chosen. For example, say Sarah named her sister, Anita, as her only healthcare power of attorney ten years ago, but Anita has since passed away. If Sarah becomes incapacitated but has never updated her healthcare POA, there is no family member designated to make medical decisions on her behalf. A similar situation could arise with a financial POA that hasn’t been updated to reflect changes in family members or relationships. 

The crux of the issue is that, when a person dies with an out of date estate plan, the fallout directly (and often exclusively) impacts their surviving loved ones—which isn’t a burden anyone wants to leave behind for their family. 

How financial advisors can help

The primary role of a financial advisor in this context is to ensure clients understand the importance of updating their estate plan at regular intervals or after any major life event. An advisor may not necessarily know when a client gets married or experiences a death in the family, but a client who recognizes the need to keep their planning updated is more likely to reach out to their advisor at these important milestones.

Advisors should also stay in tune with changes in tax or estate law and use any changes as an impetus to contact clients. Not only will this help keep clients informed, it helps build trust in the advisor-client relationship by showing proactivity and expertise.

Using technology for faster, more effective planning

Advisors who want to make estate planning easier for both themselves and their clients are turning to estate planning software like Vanilla for streamlined document creation, instant estate visualizations, modeling scenarios, and more. 

Traditionally, understanding what a plan says requires parsing dense documents, which is time-consuming and opens the door to confusion and frustration. With Vanilla, advisors have the ability to show clients exactly how their assets will flow when they pass away—ensuring their plan aligns exactly with their wishes at a glance. 

Get a demo to learn how Vanilla helps firms like yours deliver top tier estate planning experiences for every client.

The information provided here does not constitute legal, financial, or tax advice. It is provided for general informational purposes only. This information may not be updated or reflect changes in law. Please consult with an estate attorney, financial advisor, or tax professional who can advise as to your particular situation.