Situations change all the time. One moment, you could be celebrating a new business venture; the next, you could face an unexpected illness or job loss. When major life changes happen, it’s important to review and revise your estate plan accordingly.
Here are some key life events that should trigger an estate plan review:
- Marriage or the end of a marriage requires updating beneficiary designations, wills, and trusts to account for a new spouse or the removal of an ex-spouse.
- The birth or adoption of children requires naming legal guardians for minors and adjusting inheritance plans.
- Retirement and the distribution of retirement accounts like 401ks and IRAs impact your estate’s value and taxes.
- Buying or selling business or investment properties requires updating ownership interests in those business entities or real estate holdings within your estate documents.
- Moving to a new state requires revising estate plans due to differing estate laws and taxes across state lines.
- The death of a spouse, family member, executor or trustee named in your estate plan requires updating beneficiaries and representatives.
- Children reaching the age of maturity may necessitate transferring some assets or responsibilities to them as legal adults.
- Developing health issues or disabilities requires incapacity planning through powers of attorney and trusts when dealing with mental or physical declines.
The last thing you want is for your estate to not reflect your current wishes and situation. Routinely updating your plan ensures you preserve your legacy.
When you don’t update your estate plan
An outdated estate plan can lead to problems in the event of your eventual but unexpected passing. Your assets may be distributed in ways you did not intend, causing family conflicts or unnecessary taxes.
So, if your wishes and situation have changed, consider consulting a legal professional. They can review your plan and help make it accurately reflect your current estate planning goals.