An often asked question by our estate planning clients is “when should I have my will and trust reviewed by an attorney?”

Very often the standard answer from attorneys is “every five years.” But a more accurate answer is that it depends. You really need to be aware of changes in the law and in family circumstances that may trigger the need for revisions to your estate planning documents.

For example, effective January 1, 2011, the exemption amount for Federal Estate Tax purposes increased to five million dollars. Additionally, for the first time ever, the limit for lifetime gifts increased to five million dollars. You may need to discuss a current disparity between the two million dollar exemption for the State of Illinois Estate Tax, and the five million dollar exemption for the Federal Estate Tax. This difference in the state and federal exemption amounts should be addressed. Absent careful drafting, while your existing estate planning documents may exempt you from tax liability for federal purposes, you may incur a state tax liability upon the death of the first spouse to die.

Secondly, we have had an unusual amount of clients inquiring, for the first time, about taking full advantage of the increased exemption for lifetime gifting. It seems unlikely that the limitation will stay as high as five million dollars for much longer and so now is a great time to pass on wealth to a younger generation.

Also, are you aware that Illinois just recently changed their forms for powers of attorney for health care and property? Currently, more specificity is required to adequately voice your wishes regarding the administration or continuance of life-sustaining treatment upon suffering an irreversible condition. There are other changes that may be material and our experience has shown that in certain limited circumstances, your existing Powers of Attorney may not be honored.

The second class of triggering events that may cause the need for review of your estate planning documents is changes in your family and life circumstances. For example, as the children grow and become more mature, the need for testamentary trusts (trusts that are created upon your death for the benefit of minor children) may no longer be necessary. In some cases, parents still feel the need to keep money in the trust for other reasons for adult children. Divorce, changes the family dynamic, whether it be your own divorce or the divorce of one of your children. These events often bring about the need for revising estate planning documents to effectuate a change in beneficiaries or to protect a child’s prospective inheritance.

Retirement usually causes our clients to re-think their existing documents as they are confronted with a new phase in life and begin to get their “house in order.” Sometimes life-altering accidents, and children and grandchildren with special needs require special drafting so that such children and grandchildren are not disqualified from benefits under state and federal programs. Even a modest inheritance, if not structured properly could terminate eligibility.

Lastly, just remember that if you are not married, or you are married without children, preparing a simple estate planning document such as a will or trust is inexpensive and it allows you to control the disposition of your assets upon your death. Otherwise, the statutory scheme set forth in the Illinois law will control the distribution of your assets.