Lesson 97: Periodic Review Schedule

As part of an advanced estate planning process, establishing a periodic review schedule is critical. This ensures that estate plans remain current and reflective of the client's changing circumstances and evolving laws. This section will delve into the importance of a review schedule and the key components to include in such reviews.

Importance of a Periodic Review

Periodic reviews of estate plans are essential for the following reasons:

  • Legal Compliance: Laws and regulations related to estate planning can change. Regular updates ensure compliance.
  • Life Changes: Major life events such as marriage, divorce, birth, or death can significantly impact estate plans.
  • Financial Changes: Changes in the financial situation, such as acquiring new assets or changes in asset values, necessitate updates.

Key Components of a Periodic Review

A thorough periodic review should include the following components:

  • Asset Inventory: Reviewing and updating the list of assets, including new acquisitions and changes in value.
  • Beneficiary Designations: Ensuring that beneficiary designations are current and reflect the client's wishes.
  • Trust Provisions: Updating the provisions of any trusts to ensure they remain relevant and effective.
  • Tax Considerations: Reviewing and planning for any changes in tax laws that may impact the estate plan.
Note: For more detailed information on related topics, see our lessons on Generation-Skipping Transfer Tax and Charitable Remainder Trusts.

Setting a Review Schedule

Setting a review schedule involves determining the frequency and triggers for reviews. Typically, reviews should be conducted:

  • At least annually.
  • After significant life events (e.g., marriage, divorce, birth of a child).
  • Following substantial changes in financial status.
  • Whenever there are significant changes in tax laws.
  • Annual Reviews
  • Life Event Triggers
  • Financial Changes
  • Tax Law Updates

Review Process Workflow

The following diagram illustrates a typical workflow for the periodic review process:

graph TD A["Initiate Review"] --> B["Gather Information"] B --> C["Analyze Current Plan"] C --> D["Identify Changes Needed"] D --> E["Implement Changes"] E --> F["Communicate Updates"] F --> G["Finalize and Document"] G --> H["Schedule Next Review"]

Gathering Information

During the review process, it's crucial to gather comprehensive information, including:

  • Current asset inventory.
  • Updated financial statements.
  • New or changed beneficiary information.
  • Relevant legal documents.

Analyzing the Current Plan

Once information is gathered, the current estate plan is analyzed to identify areas that require updates. This includes reviewing:

  • Current trusts and their provisions.
  • Wills and any codicils.
  • Power of attorney documents.
  • Healthcare directives.

Identifying Changes Needed

After analyzing the current plan, the next step is to identify any changes needed. This can involve:

  • Updating asset ownership and beneficiary designations.
  • Revising trust provisions to reflect new intentions or compliance with law changes.
  • Adjusting for any new tax strategies or considerations.

Implementing Changes

Once changes are identified, they need to be implemented efficiently. Ensure that:

  • All legal documents are updated and properly executed.
  • Beneficiaries are informed of any significant changes that affect them.
  • Financial institutions are notified of updates to account ownership or beneficiary designations.

Communicating Updates

Effective communication is crucial in the estate planning process. Key steps include:

  • Notifying family members and beneficiaries of important changes.
  • Informing trustees and executors of their updated roles and responsibilities.
  • Providing a summary of changes to all relevant parties.

Finalizing and Documenting

After implementing changes and communicating updates, it's important to finalize and document the process:

  • Ensure all documents are signed, notarized, and stored securely.
  • Maintain a record of the review process and the changes made.
  • Schedule the next review to ensure the estate plan remains current.
Note: For more detailed information on related topics, see our lessons on Qualified Personal Residence Trusts and Intentionally Defective Grantor Trusts.
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