Your life circumstances vary over time, and so should your estate strategy. As a general guideline, you should review your estate plan every 5 years and after any important life events. Updating your estate plan ensures that it stays in line with your objectives and is legal.
In addition to changes in the law, individuals often grow more (or less) philanthropic over time, and changing family dynamics may need modifications. Your estate planning lawyer will also need to be updated if any of the following important life events occur:
Following a marriage, you will want to identify your spouse not just as a beneficiary, but also as:
- Financial agent to manage your financial affairs if you become incompetent;
- Healthcare agent to make healthcare choices if required; and
- Trustee of any trusts you may create.
Updating your estate plan to reflect changes in your family will help you prevent future disputes, ambiguity, and perhaps litigation.
The first child
The birth or adoption of a first child is a significant event. Including your kid in your estate plan safeguards your heritage. A new kid presents a variety of difficulties that should be addressed in an estate plan. Do you want your spouse to inherit all of your assets now that you have a kid, or do you want to take efforts to protect assets for your descendants? These are just a few of the issues that must be addressed in your estate plan after the birth or adoption of your first child.
You’re undoubtedly in need of updated estate planning documents after a divorce. Any changes you make after getting married will very certainly need to be reversed. If you have been divorced and remarried since the last time you updated your estate plan, you should prioritize amending your estate plan.
A major change in financial condition if the value of a company, real estate, or stocks you own has increased or decreased significantly, you should review your financial situation and amend your estate plan appropriately. If your fortune changes significantly, you may want to reconsider how you distribute it among your beneficiaries. Revisions may also be necessary if you have acquired or sold a significant asset. Furthermore, considerable growth in wealth may need tax preparation to ensure an effective transfer of assets upon your death.
A new health diagnosis also indicates that it is time to organize your affairs. You should ensure that your estate plan appropriately represents your wishes for when you pass away. Your complete estate plan, including asset titling and beneficiary choices, may be reviewed by an estate planning attorney. You will have peace of mind knowing that you have a good estate plan in place and that you have alleviated as much strain as possible on your loved ones.
Retirement is a significant event. Many individuals save for retirement for years, if not decades. However, they often fail to consider upgrading their estate plan. For most individuals, retirement is the point at which their principal source of income changes away from their employment. In retirement, your financial environment will shift substantially, and you will want to ensure that your estate plan matches these changes. Retiring also implies that your children are grown, maybe married, and may have their own children. Your old papers may include out-of-date terms, and you may want to leave some legacy to your grandkids.
If you need to make modifications to your estate plan, trusts and estate planning attorney may analyze your existing plan and help you to establish and implement a complete estate plan tailored to your specific circumstances