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Your Estate Plan Might Be Outdated—And That Could Mean Legal and Financial Trouble for Your Family

Missy E
November 14, 2025

Key Takeaways

An outdated estate plan can expose your family to unnecessary legal battles, taxes, and delays.
Regular updates to your will, beneficiaries, powers of attorney, and retirement account designations are essential, especially after major life or policy changes.

Why Estate Planning Still Matters After Retirement

If you’re like many public sector retirees, you may assume your estate plan doesn’t need much attention now that your career is behind you. You’ve got your pension, Thrift Savings Plan (TSP), and perhaps Social Security or other savings in place. But here’s the truth: just because you’ve stopped working doesn’t mean your estate plan stops evolving.

Your financial picture changes in retirement. Your beneficiaries’ needs evolve. And new regulations, tax laws, and even family dynamics can shift what a sound estate plan looks like. Failing to revise outdated documents can leave your loved ones facing probate court, family disputes, and lost assets.

What Should Be in a Basic Estate Plan in 2025?

At minimum, your estate plan should include the following key documents:

Last Will and Testament: Distributes your property and names guardians for any dependents.
Revocable Living Trust (optional but recommended): Helps avoid probate and provides flexibility.
Durable Power of Attorney: Names someone to manage your finances if you’re incapacitated.
Healthcare Power of Attorney and Living Will: Outlines your healthcare wishes and designates a proxy.
Beneficiary Designations: Applies to your TSP, life insurance, IRAs, and annuities.

Each of these should be reviewed regularly—ideally every three to five years or immediately after any major life change.

Major Life Events That Demand an Update

Failing to adjust your estate plan after significant events can lead to unintended consequences. These events include:

Retirement or career shift
Marriage, divorce, or remarriage
Birth or adoption of children or grandchildren
Death of a spouse or family member named in your plan
Relocation to another state (laws vary by state)
Significant change in financial status

For instance, if your TSP beneficiary is still your former spouse, that’s who may receive your account even if your will says otherwise. TSP and other retirement accounts are controlled by beneficiary forms—not your will.

When Was the Last Time You Reviewed Your Beneficiaries?

Many government retirees fail to update their beneficiaries after retirement. That’s a critical mistake. Your:

TSP
FEGLI life insurance
CSRS or FERS survivor benefit elections
IRAs and private accounts

… all require direct beneficiary forms. And the last one you filed—regardless of what your will says—takes legal precedence.

In 2025, digital platforms make it easier to check and revise your beneficiary designations, so there’s no reason to delay.

Federal Benefits That May Be Affected by Poor Planning

If your estate plan is outdated, here’s how it can disrupt your government retirement benefits:

FEHB survivor coverage: If you haven’t elected a survivor annuity for your spouse, they can lose FEHB coverage after your death.
FERS or CSRS pension payments: Improper or outdated survivor elections may reduce or delay distributions to dependents.
TSP distribution issues: If no beneficiary is named, your TSP could go to your estate and be subjected to probate delays.
Life insurance proceeds: Without current forms, FEGLI benefits may go to an unintended recipient—or to the estate, increasing tax liability.

Why Probate Can Be So Costly and Time-Consuming

Probate is the court-supervised process of distributing your assets if you die with or without a will. It can take months, sometimes over a year, and involves legal fees, court costs, and stress for your family.

While having a will is better than having nothing, assets like your TSP, bank accounts, or property still pass through probate unless they are:

Held in a trust
Have joint ownership with right of survivorship
Include transfer-on-death (TOD) or payable-on-death (POD) designations

Setting up a living trust or naming beneficiaries on all eligible accounts is one of the best ways to minimize probate exposure.

Common Mistakes That Public Sector Retirees Make

Here are the most common estate planning errors you might want to avoid:

Failing to coordinate your will with your federal benefit forms
Using outdated documents drafted under old laws
Not updating your plan after retirement or remarriage
Naming minor children as beneficiaries without a trust
Assuming all assets will automatically go to a spouse
Ignoring digital assets or online account access instructions

Even if you worked with a reputable estate planner years ago, laws and family dynamics change. Make it a habit to schedule regular reviews.

The Role of Federal and State Law in 2025

Federal rules still govern much of your public retirement package (TSP, CSRS/FERS, FEGLI), but estate planning is mostly driven by state law. And states vary widely.

Some states impose estate or inheritance taxes, even if the federal exemption is high.
Community property states have unique spousal rights that may override your will.
Digital signature and notary laws have evolved in many jurisdictions.

If you’ve moved states since retiring, your estate documents may no longer comply with current rules. Have an attorney in your new state review them.

Don’t Overlook the Impact of Taxes

In 2025, the federal estate tax exemption is still high—over $13 million per person—but that could change in coming years if temporary provisions expire.

State estate or inheritance taxes, however, can apply at much lower thresholds. In addition, income taxes may be owed by heirs if they inherit traditional TSP or IRA accounts and don’t follow proper distribution rules.

Proper estate planning can:

Spread distributions over time using trust structures
Use Roth conversions to reduce taxable inheritance
Prevent double taxation by avoiding probate

How Often Should You Review Your Plan?

A solid rule is every 3 to 5 years, or sooner if:

You or your spouse retire
There’s a new grandchild
One of your named agents or trustees passes away
You divorce or remarry
Federal law or state law changes

Don’t rely on autopilot. A periodic check-in with a professional can prevent most estate planning pitfalls.

What Happens If You Don’t Have an Updated Plan?

Without an updated plan:

State law decides who gets your assets—which may not align with your wishes.
Family conflict is more likely, especially in blended families.
Court-appointed guardians may control decisions, not the person you would’ve chosen.
Delays and fees can erode inheritances.

Even worse, your surviving spouse could lose access to health benefits or pension income you thought you had protected.

The Legal Documents You Might Be Missing

Along with a will and trust, many retirees overlook other legal forms that protect them while they’re still alive:

HIPAA authorization forms so loved ones can access medical records
Digital asset instructions for email, social media, and online banking
Final disposition instructions outlining burial or cremation preferences

In 2025, estate planning is no longer just about inheritance—it’s also about personal dignity and control.

Protecting Your Family Starts With a Conversation

Whether you’ve been retired for five years or five months, you owe it to your family to make sure your estate documents reflect your current wishes, beneficiaries, and legal realities. What worked in 2015 may no longer work in 2025.

Don’t wait for a crisis. Talk to a legal or financial professional who understands public sector retirement and estate law. The peace of mind—and financial protection—for your loved ones is worth the effort.

For support tailored to your government retirement benefits, speak to a licensed agent listed on this website for personalized guidance.