When should you update an estate plan?

| Mar 20, 2020 | Firm News

Creating an estate plan is a big step toward making sure your family members are taken care of after you pass away. While some people don’t like having to make these plans, they do need to take the step anyway. Failing to do so can leave their family members without the legal means to obtain what you wanted them to have.

You can’t just make these plans and then forget about them. Instead, you will have to review them periodically to ensure they still reflect your current wishes. It’s a good idea to do this on a set schedule, such as every year or two. However, you might also need to initiate modifications if you go through certain changes in your life.

Asking yourself these questions might help you to determine whether it’s time to review the plan.

Have you gotten married or divorced?

If you get married, find out how that will impact your estate plan components. If you are going through a divorce, you might not want your ex to acquire your assets when you pass away. Make sure that you check things like life insurance policies and financial accounts to determine who gets those. You may need to change the beneficiary or payable on death designation when you update your estate plan.

Do you have a new baby or a new adult child?

You must ensure that you include a new baby in the estate plan. When your children mature into adults, you may realize that you need to change things to reflect the new circumstances. You may also need to include grandchildren if your kids have babies of their own.

Have you acquired or gotten rid of assets?

Your estate plan must accurately reflect the assets you have in your control. One issue that can occur is that you don’t take an asset out of the estate plan but sell it, which can lead to the estate having to purchase that asset to distribute. This can be costly so it’s best to remove them from the estate as you part with them.

You must ensure that you set up an updated estate plan in a manner that meets legal requirements. Working with someone familiar with this might be beneficial so you can ensure everything is ready for your family when they need it.

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