Is it important to update your Estate Plan? Yes! And here is why.
Updating your estate plan is crucial to ensure that it remains aligned with your wishes and reflects any significant life events or changes in circumstances. Failing to update your estate plan can lead to unintended consequences and may not adequately protect your assets or provide for your loved ones in the event of your passing.
When should I update my Estate Plan?
While you are likely not sitting around thinking about your estate plan during these events, consistent evaluation of your estate plan will remind you to make appropriate changes when life circumstances have changed. There are several reasons and life circumstances that should trigger you to review and update your estate plan. Some of these reasons include but are not limited to:
1. Marriage, divorce, or remarriage: When you get married, you may want to include your spouse in your estate plan, designating them as a beneficiary or granting them certain powers. On the other hand, divorce or remarriage may necessitate changes to your plan to remove or add beneficiaries, update powers of attorney, or modify provisions related to property distribution.
2. Birth or adoption of children or grandchildren: The arrival of a child or grandchild is a significant event that often prompts updating your estate plan. You may want to establish guardianship provisions, set up trusts for their benefit, or adjust your distribution plans to include the new family members.
3. Death or incapacity of a beneficiary or executor: If a beneficiary or executor named in your estate plan passes away or becomes incapacitated, you’ll need to review and update your plan accordingly. This may involve selecting new beneficiaries or appointing alternate executors or trustees.
4. Changes in your financial situation: Significant changes in your financial circumstances, such as an inheritance, sale of assets, starting a business, or acquiring substantial debt, may require adjustments to your estate plan. It’s important to ensure that your plan properly addresses your current financial situation and aligns with your goals.
5. Relocation to a different state or country: If you move to a different jurisdiction, it’s crucial to review your estate plan because laws related to wills, trusts, and probate/succession vary by location. Your plan may need to be updated to comply with the laws of your new residence and to ensure its effectiveness.
6. Changes in tax laws: Tax laws are subject to change, and modifications in these laws can impact your estate plan. Consulting with an estate planning attorney can help you navigate any changes and make necessary adjustments to your plan to optimize tax efficiency and minimize potential tax burdens.
7. Changes in personal relationships or wishes: As your personal relationships evolve, you may need to reassess your estate plan. This could involve altering beneficiaries, addressing estranged family members, or adjusting provisions to align with your current wishes and intentions.
How do you update your estate plan?
The easiest way to make updates to your estate plan is to contact an attorney that provides estate planning services. An estate planning attorney will have the knowledge of the ever-changing tax laws and proper procedures necessary to make changes that will be properly implemented to accommodate your new circumstances and life changes.
How often should I review my estate plan?
Regularly reviewing and updating your estate plan, ideally with the guidance of an experienced estate planning attorney, is essential to ensure that it accurately reflects your desires and adapts to changes in your life. By doing so, you can have peace of mind knowing that your estate will be handled according to your wishes and that your loved ones will be provided for appropriately. A quick annual review of your estate plan will prompt you to schedule an appointment with your estate planning attorney should any changes need to be made due to life events and changes in circumstances.
If you have an existing estate plan, you should schedule time annually to review your estate plan so the joy of new family members or the sorrow of family loss or divorce or any other life event do not leave your estate at risk of being distributed in ways you do not intent. Having an updated estate plan in place is debatably just as important as having one at all. If you do not currently have an estate plan or are seeking estate planning services from an attorney on an existing estate plan, call Carmen! Carmen is skilled in estate planning and succession and would be happy to answer any additional questions or concerns you may have. Contact Carmen today.