One thing not to have is a workflow that kicks off whenever a document is modified and then does nothing for 365 days. If for no other reason than SharePoint has a workflow clean-up that normally removes Workflow instances after 60 days.
I'm assuming you're using SharePoint Server rather than Foundation so what I suggest you look at is the Retention stuff in Information Management Policies. This is pretty limited and can't directly send emails but it can kick off a workflow when a certain conditions are met (e.g. Modified + 365 days). You can set up retention policies at site collection, content type and library level. However only content type/library level ones allow you to start workflows.
To set this up on a library (simplest example) first create a simple workflow in your library that sends the email, just create it as a manual workflow (i.e. one that's not started when a document is created or changed).
Setting up the retention policy:
- In the Library settings go to Information Management Policy Settings
- Select the content type (Document on a standard library)
- Click Enable Retention
- Click Add a retention stage...
- Set your time period for your first rule e.g. Modified + 365 days
- Select Start a Workflow Select your workflow
I suggest you don't use the recurrence option as I suspect that would just continue to spam your users even after they modified the doc though I've not tested that. Instead you can create further retention stages for Modified + 380 days etc. which shouldn't fire if the user has modified the document.
Forgot to mention that you need to enable the Library and Folder Based Retention site collection feature for this option to appear