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Keeping Your Estate Plan Healthy with Periodic Check-Ups

Your estate plan may only be truly up-to-date the day you sign your estate planning documents. This statement no doubt may dismay you and perhaps be unwelcome, in particular given the effort, time and expense that goes into preparing wills, trusts and powers of attorney. The reality is that our lives are in a constant state of flux.

Our personal circumstances and those of close family members and friends who are beneficiaries in our estate plans change for many reasons: children becoming financially mature, marriage, divorce, births, deaths, relocations to different jurisdictions and new medical conditions, to name a few. Just as dynamic is the make-up of our assets–real estate is acquired and disposed of, the value of our net worth increases, new insurance policies or registered plans are acquired and beneficiary designations are changed. Layered on top of these are changes to tax and estate planning legislation. 

Because of the fluid nature of peoples’ lives and property and the significant impact change can have on the ultimate success of a person’s estate plan, we have often taken the opportunity in past blog posts to highlight those situations that trigger a review of one’s estate plan (see, for example, the following recent posts: July 28, 2015, May 29, 2015, March 5, 2015, December 10, 2014 and February 11, 2014).

The primary goal of any estate plan is to ensure our wishes, intentions and goals are fulfilled at some future point in time–often upon death. In preparation, we create estate planning documents, but for the most part, they only reflect a current personal and financial “snapshot” (albeit with some built-in flexibility for future circumstances). Creating an estate plan today that will optimize our situation five, ten, fifteen or twenty years down the road is simply not realistic.

A few examples: you named a close relative as your attorney for property, who a few years later moves to the U.K. and it is no longer practical for her to act in that capacity if you become incapable. Or you named guardians for your minor children in your will when the children were quite young, but due to changes in the guardians’ personal circumstances or your relationship with them, they are no longer your desired choice to act as guardians. Or your child has moved to the U.S. and you are now concerned about the impact of U.S. estate tax on his inheritance.

We need a paradigm-shift. Estate planning should not be viewed as a “transactional” event, but instead should be viewed more holistically, as an ongoing and organic process. Just as our physical health changes as we grow older, requiring the need for regular assessments to evaluate and maintain our well-being, our estate plans need similar periodic check-ups and changes where appropriate to ensure their optimal performance when they are put into action.

A check-up could include a review of the following:

(a) whether current wishes, goals and intentions match or differ from those reflected in your planning documents;

(b) whether current asset ownership and beneficiary designations are aligned with your current wishes and goals and reflect your estate plan;

(c) whether changed personal circumstances impact the estate plan; and

(d) any new tax or legal developments.

A process for regular review and communication with one’s estate planning advisors–similar to the ongoing relationship we have with our health care professionals for regular check-ups–is important. The focus should be on maintaining the plan to ensure that when it comes time for its implementation, it will function appropriately.

Some food for thought. We hope to write more on these ideas and develop them further in future posts. Stay tuned!

Please watch for our next post on the EU Succession Regulation and its potential impact on Canadian estate planning.

The comments offered in this article are meant to be general in nature, are limited to the law of Ontario, Canada, and are not intended to provide legal or tax advice on any individual situation. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your personal circumstances.