The first estate plan that you ever make is a snapshot of your life at that point in time, but as your life changes, so should your estate plan. Whether it’s from your family structure to new tax laws to the gaining of new assets, all situations could affect your original plan.
It isn’t uncommon for us to see people who understand the importance of having an estate plan, but then they forget to keep everything up-to-date. These documents are not something you can create once and file away for later.
Family & Personal Changes
There are a variety of life changes that could take place, here are a few key ones we commonly hear about from our clients.
Change In Marital Status
A change in marital status may leave you wanting to include someone in your estate plan that was not in it before or take someone out that was in your plan at the time you made it.
If you are newly married, we want to make sure your intentions for your new spouse are reflected in your plan. In the event of a separation or divorce, you may want to ensure your ex is no longer included in your plan.
Adoption or Birth of a Child
Adding a child to the family is an exciting time, and also the perfect time to revisit or create your estate plan. When adding a new child to the family, whether through birth or adoption, you’ll want to be very specific about how and when you want that child to receive funds.
Your estate plan isn’t just about the assets you want to leave your children, but it’s also about who and how you want them raised if anything happens to you. Our Child Safeguard Plan helps you ensure your children are being taken care of by someone you trust and helps ensure they stay out of foster care.
Minors Becoming Adults
For those with children, you will want to update your plan as your children become adults. It’s important to consider how you would like to leave them their inheritance. It could be in a trust or give it to them outright, but no matter what you decide to do, you need to take into consideration how financially responsible your children are.
Taking these things into consideration will help you prepare a lasting legacy for your children and grant you peace of mind, because you’ll know your estate plan was set up in a way so that your children’s inheritance stays with them.
Change in Health
A change in health status may cause you to reconsider the instructions outlined in your living will. Updating your estate plan as your health changes ensures that your loved ones and healthcare providers are apprised of your decisions.
It’s important to update your estate plan if you’ve become a caregiver to a child or relative with special needs. Updating your plan to reflect if you want caregiving services to continue for your loved one in the event of your death is important, as your loved one may not be able to live on their own.
Updating your estate plan to have your loved one’s care in mind may look like setting aside money for that care, and including information about your loved one’s care.
Death of a Loved One
Designating someone as your healthcare power of attorney or financial durable power of attorney is a great step to take, however if that person has passed away or been found incompetent, they can no longer serve in these roles. You’ll need to appoint someone new.
Many people appoint a secondary healthcare power of attorney or financial durable power of attorney in the event the first is unavailable. It is still important to update your estate plan to reflect your current decision as to whom you want to make your decisions for you.
Moving to another state means you’ll need to have a new estate plan drawn up, or at least have an attorney review your plan to ensure it is valid under your new state’s laws. Not every state has the same estate laws, so if you don’t change your estate plan, then it might not be distributed in the way you intended.
Changed Your Mind
Your estate plan may need to be updated for as simple a reason as you have changed your mind. Maybe you want to change who you give a family heirloom to, or maybe you want to change your power of attorney.
Changes to Your Assets
As you get older, there’s the possibility of acquiring more assets, such as real estate, cash, bank accounts and even life insurance policies.
Acquired New Assets
Acquiring new assets is just part of life, however like everything else that’s changing in your life, you’ll need to update your estate. As the value of your assets change, there’s more to consider in your estate plan. You should include any new assets in your estate, so that they’re accounted for and will be protected from probate. Acquiring new assets may also affect the tax implications of your estate plan, so it’s important to review your entire estate with your attorney as the value of the estate changes.
Change in Business Interests
Whether you have acquired a new business interest or lost a previous one, it is important that your estate plan matches your current business interests. If you own and operate a business, it’s important to have a plan in place when you cannot continue operating the business.
These changes don’t fit with family or personal changes, and they don’t fit with changes to your assets, but they’re just as important.
Successor Trustee, Guardian, or Administrator Change
If your successor trustee, guardian, or administrator becomes ill, moves away, or changes their mind, you will need to update your estate plan to appoint someone new. If possible, you should always have backup options for the people who fill these roles.
Tax Laws Change
As state and federal tax laws change, the way your estate is impacted can change as well. In order to ensure your estate has the lowest tax liability possible, we want to review and potentially update your estate plan regularly.