How Often Should I Update My Estate Strategy?

About the author: Lamar Watson, CFP®, is a Fee-Only Financial Advisor in the Washington, D.C., area who works with clients virtually across the country. Dream Financial Planning is a Fiduciary Financial Planning firm specifically designed to help individuals at any stage of life take control of their finances and fulfill their dreams. Feel free to schedule a Free Consultation to learn how we use the DREAM Financial Planning Process ™ to help our clients achieve their goals. 

If you missed our recent monthly market update you can view it here. I've also included two blog posts below that are worth taking a look at:

• Where Should My Next Dollar Go?
• What To Do When You're Retirement Goals Change

If you're looking for a cost-effective solution to get your estate planning documents in place, we can help. We have partnered with a leading Estate Planning platform to deliver high-quality Estate Planning documents for a fraction of the cost of working with an attorney. I included a blog post below that highlights the key documents that should be in your Estate Plan and my normal pricing.

What's In Your Estate Plan?

Revocable Living Trust-Based Estate Plan

• Individual - $1,600
• Couple - $2,100

Will-Based Estate Plan

• Individual - $900
• Couple - $1,400

Probate Can Be Expensive

If you don't take steps to avoid probate the cost could be significant to those who inherit your assets. I'd estimate it could be approximately 3-7% of your estate's value depending on your state of residence and the size of your estate. So, it's better to spend much less on the front end and get Estate Planning documents in place, so your heirs don't get stuck with a significant cost after you pass away,

Estate strategies for the future may be essential, especially when it comes to securing the well-being of your loved ones after you're gone. Your strategy is not a one-time task but a process that should evolve with your and your family's needs. Let's explore why regularly examining your estate strategy and updating it when necessary is key to generational financial well-being.

How Often Should I Update My Estate Strategy?

Many people wonder, "How often should I update my estate strategy?" The general rule of thumb is at least every 3-5 years, if not more often. Fidelity recommends reviewing your estate strategy when you review your entire financial plan, which could be annually, semi-annually, or quarterly.¹

But more importantly, you should review your estate strategy whenever you have a major life change.

Your estate strategy is a comprehensive set of legal documents that outline your wishes regarding your assets, property distribution, healthcare preferences, and more. However, life is unpredictable, and circumstances can change. Without regular updates, your estate strategy may not reflect your current situation or wishes.

Major Life Events That Signal an Estate Strategy Review

While everyone may review their estate strategy regularly at different intervals, certain life events should prompt an immediate review of your estate strategy. Here are some key events to consider:²

Marriage or Divorce
When you get married, you'll likely want to update your estate strategy to include your spouse as a beneficiary. Conversely, divorce may necessitate removing an ex-spouse from your strategy.

Birth or Adoption of a Child
Welcoming a new child into your family means updating your strategy to include them as a beneficiary. You'll also want to appoint guardians if something were to happen to you and your partner.

Death of a Loved One
The passing of a spouse, child, or another beneficiary should prompt a review of your estate strategy to ensure assets are distributed according to your new wishes.

Change in Financial Status
Significant changes in your assets, whether through inheritance, investments, or property acquisitions, should trigger a review of your estate strategy.

Relocation to Another State or Country
Laws regarding estates vary by jurisdiction. If you move, it's essential to review your strategy to ensure it complies with local laws.

Changes in Health
If you're diagnosed with a serious illness or experience a decline in health, you should review and update your healthcare directives and powers of attorney.

The question of "How often should I update my estate strategy?" comes down to a balance between regular reviews and responding to major life events. While a general timeline of every 3-5 years is a good rule of thumb, life changes should always prompt a review of your estate strategy. Your strategy should be a reflection of your current circumstances, wishes, and the legal landscape. By staying proactive and updating your estate strategy accordingly, you can ensure that your loved ones are taken care of and your legacy is protected.

If you'd like help setting yourself up for financial success feel free to schedule a free consultation. You can learn more about our fees and services at the links provided.

August Discounts

To close out the summer I'm waiving the initial fee for new and returning ongoing financial planning clients for the month of August. The ongoing financial planning program also includes tax prep for your personal taxes. Don't miss this limited-time opportunity to achieve financial success at a significant discount to our normal pricing. Regular prices are:

• $999 Initial Fee and $400 per month for individuals
• $1,499 Initial Fee and $600 per month for couples

I recommend a minimum of six months for this service, but you can cancel anytime. You can learn more about our fees and services at the links provided.

Different Ways You Can Work With Us

Wealth Management - Combines ongoing financial planning and investment management. The financial planning fee is waived if we manage at least $1,000,000 in investments for you. You can review our investment management fee structure here. Tax Preparation and the ability to create a Will or Revocable Trust-based Estate Plan will be included.

Ongoing Financial Planning - Starting at $400/month, our most popular program now includes tax prep. This is a good fit if you have several goals and want the option to manage your investments. We'll cover everything from spending, insurance, taxes, investments, retirement planning, and estate planning. Our goal is to give you and your family an easy-to-understand comprehensive plan to provide you with confidence you're making the right financial decisions.

One-Time Financial Plan With Ongoing Support - Starting at $4,800, this is an accelerated version of the service above with additional support for one year after your start date. This service requires prepayment for the year and is offered at a significant discount from the annual pricing for ongoing planning. Tax Preparation and the ability to create a Will or Revocable Trust-based Estate Plan will be included.

Tax preparation is now part of the ongoing financial planning program. This will be in addition to the Tax Report we already generate for clients and our work with the IRS Withholding Calculator to help prevent our clients from getting a surprise tax bill.

Three-Hour Ask Me Anything - This is a good fit if you have 2-3 goals you want help with. These three one-hour meetings need to be completed within three months. The fee for this service is $2,000. You also get a free 30-minute meeting to help us get started.

Financial Coaching - Our financial coaching program starts at $99/month. This is ideal for someone who is looking to simplify and automate their finances. We'll also serve as an accountability partner and help you overcome obstacles that may be stopping you from accomplishing your goals. You can learn more about our coaching program here. If you think this program might be a good fit for you, schedule a 15-Minute Demo.

Hourly Financial Planning -Billed at $400 per hour. For each hour of meeting time, we'll bill at least one additional hour for meeting preparation and follow-up.

Our Full-Service Process For New Clients

Net Worth and Budget

The first thing I do for new clients is assess their current financial situation. We do this with the aid of financial planning software. We review assets, liabilities, income, and expenses. If you'd like to test drive my comprehensive financial planning software, visit Right Capital and create a profile. View this Right Capital video to learn more.

Insurance

As a Fee-Only Firm, we don’t sell insurance or charge commissions. However, we like to review home, auto, and umbrella insurance to make sure you have the proper coverage. We’re happy to work with your existing agent or refer you to an independent broker to make sure you get the best deal. We also look at your employee benefits, long-term and short-term disability insurance, along with life insurance to make sure your family is protected.

Tax Preparation and Tax Planning

Tax preparation is now part of the ongoing financial planning program. This will be in addition to the Tax Report and Tax Planning we already generate for clients. We also use the IRS Withholding Calculator to help prevent our clients from getting a surprise tax bill.

Investments

Whether you want us to manage your investments or you want to manage them yourself and you're just looking for a second opinion, we can help. We'll help you optimize your investments to make sure you’re not leaving any money on the table. Here’s an example of the quantitative analysis I can do for your investment accounts where we also evaluate your current fees.

If you’d like to review your risk tolerance, complete our risk tolerance questionnaire. This will give you your personalized risk number as seen on page 1 of the sample portfolio above. Feel free to check out the article 10 Best Tips for Beginning Investors from U.S. News where I shared a few investment tips.

Retirement Planning

This is where we bring everything together. Take a look at the links below for examples of some of the deliverables we prepare for clients.

• Get Your Free Retirement Check Up
• Elements® Financial Monitoring App
• One Page Financial Plan
• Financial Independence Presentation

Estate and Legacy Planning

If you're looking for a cost-effective solution to get your estate planning documents in place, we can help. We have partnered with a leading Estate Planning platform to deliver high-quality Estate Planning documents for a fraction of the cost of working with an attorney. I included a blog post below that highlights the key documents that should be in your Estate Plan and my normal pricing.

What's In Your Estate Plan?

Revocable Living Trust-Based Estate Plan

• Individual - $1,600
• Couple - $2,100

Will-Based Estate Plan

• Individual - $900
• Couple - $1,400

I hope we get the opportunity to work together. If you'd like to see if any of these services are a good fit for you, feel free to schedule a free consultation or send me an e-mail.

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