A Year-End Estate-Plan Review: What Actually Needs to Be Updated

A year-end estate-plan review is one of the most useful things a client can do — and one of the most often skipped. It is not glamorous and it is not expensive; for most clients it is a 30-minute conversation with the firm and a short follow-up checklist. But the small adjustments that come out of it are exactly the ones that, left undone, become the issues that surface during a difficult administration five or ten years later.

This post is a structured walkthrough of what actually needs to be looked at — and a few items that get attention disproportionate to their importance.

What changed for you this year

Start here. The questions are blunt:

• Did anyone die, get married, get divorced, or have a child? Each of these, for the people named in your plan or for you, is a reason to reopen the document.
• Did your asset picture change materially? A new house, a sold business, a significant investment account, or an inheritance.
• Did anyone you named to a role become a poor choice? A successor trustee with deteriorating health, an estranged sibling who is no longer the right call as health-care agent, an executor who has moved out of state.
• Did a beneficiary's circumstances change in a way that affects how you would want them to receive an inheritance? A child going through divorce, an addiction issue, a creditor problem, a special-need that has emerged.
• Did anyone become a U.S. resident, U.S. citizen, or non-resident? Cross-border issues affect estate planning in ways most people do not anticipate.

If none of those things changed, the rest of the review is mostly mechanical. If any of them did, the plan probably needs more than a refresh.

What changed in the law that affects your plan

Federal estate, gift, and generation-skipping transfer tax rules and exemptions move with legislation. The federal estate-tax exemption has been on a sunset path under prior law and is among the items frequently revisited in tax legislation; whether and how it changes affects planning for higher-net-worth families. California estate tax remains a non-issue for state purposes; California does not impose its own estate tax.

A few specific items the firm tracks each year:

• Federal estate-tax exemption. Whether and when it sunsets, and any new legislation.
• Annual gift-tax exclusion. The federal annual exclusion is adjusted for inflation; the inflation-adjusted figure for the year affects gifting strategies.
• California small-estate threshold. Recently raised; the figure used for small-estate affidavits matters when evaluating whether a probate is necessary on a particular asset.
• Proposition 19. California's 2020 amendment to parent-child and grandparent-grandchild reassessment rules has matured in court, and the practical implications for transferring real property within the family continue to be refined.
• SECURE Act and SECURE 2.0. Distribution rules for retirement accounts inherited by non-spouse beneficiaries continue to be the subject of IRS guidance.

A year-end review touches on whichever of these are relevant to your specific plan; for most clients, only one or two are.

What to actually update — and what to leave alone

Three categories of update are worth doing routinely:

Beneficiary designations. As an earlier post discussed, beneficiary designations override your will and trust. A year-end review is the right moment to confirm that current designations on retirement accounts, life insurance, and POD/TOD accounts reflect current intent. This is the single highest-leverage item on any annual estate-plan checklist.

Asset-funding status. If real property was acquired during the year, has it been transferred into the trust? If the family business interest was issued, has the assignment to the trust been signed? If a new brokerage account was opened, is it owned by the trust or the individual? Funding gaps tend to develop quietly between formal plan updates; a year-end check catches them while they are still small.

Fiduciary contact information. Successor trustees, agents under powers of attorney, and health-care agents change addresses, phone numbers, and email addresses. The plan does not need to be amended for this — but the contact list the family will rely on at the moment it matters does need to be current.

Three categories that often get attention but usually do not need updates:

• Specific dollar amounts in the trust. Most well-drafted California trusts use percentages and shares, not dollar amounts; if your plan does too, inflation does not require an update.
• Standard distribution language and incapacity clauses. Unless circumstances have changed, the standard provisions in a recent California trust have not aged.
• Witness, notary, and signing formalities of an existing valid plan. A 2020 plan that was correctly signed and notarized is still correctly signed and notarized in 2025 unless something material has changed.

When a refresh is actually a rewrite

A few situations warrant more than a touch-up:

• A plan more than ten years old that has not been reviewed in the interval
• A plan signed before a significant life event (divorce, remarriage, the death of a named fiduciary or beneficiary)
• A plan that was prepared from a template or do-it-yourself service
• A plan that does not include funding for assets that have since been acquired

In each of these, the right answer is usually a fresh plan rather than a series of amendments, and the firm will say so.

The 30-minute call

If you have a current plan and want a year-end check-in to confirm nothing has changed that warrants action, the firm is happy to schedule a brief flat-fee consultation specifically for that purpose. Most reviews end with one or two action items — usually beneficiary updates or a funding step — and a confirmation that the plan is otherwise still doing its job.

If that sounds useful, please reach out.

This article is general information and not legal or tax advice. Federal and state law affecting estate plans changes; specific situations need specific review with current authority.