Our lives are constantly changing. Along with these life changes, your estate planning goals and objectives may also change. You should, therefore, review your estate planning documents regularly to address any major life events that might require you to update your estate plan.
Why Reviewing and Updating Your Estate Plan is Necessary
Your estate plan should always reflect your current situation. The estate plan you put in place when you were a 26-year-old newlywed with your first child will not meet your needs and objectives when you are 56 years old with 2 children and 3 grandchildren.
The reality is that you can’t predict what’s going to happen in your life. So, you can only plan the best way you can. That means being vigilant and updating your estate plan as major life events occur.
When To Review and Update Your Estate Plan
Your estate plan needs to be updated regularly (at least every three years) to address changes in your life and so that it can do what you want it to do. That said, here are 10 major life events that should automatically trigger a review and update of your estate planning documents:
- Birth– whenever there is a birth in the family you should update your estate planning documents to provide (or not provide) for the new member of your family.
- Adoption– similar to a birth, if you or one of your children adopts a child, you need to reevaluate your estate plan to determine how the adoption will factor into it. Don’t assume that the adopted child is already covered under your plan.
- Marriage– whenever you or a family member gets married, you need to determine how it affects your estate plan, particularly if your family includes children from previous relationships.
- Divorce– similar to a marriage, if you or one of your children gets divorced, you may have to update your estate plan to avoid any undesired consequences.
- Death– this includes the death of a spouse, child, grandchild, or another beneficiary, as well as, the death of someone you named to be the executor of your estate, successor trustee of your trust, and/or the guardian of your minor children.
- Addiction– it is an unfortunate reality that an estate plan must often address a loved one’s addiction. However, if you have a loved one who is addicted to drugs, alcohol, gambling, etc., it is probably not a good idea to give them their inheritance outright. You may want to reevaluate your estate plan and perhaps create a trust. This way your loved one will still have access to the resources they need for their well-being, but not to feed their addiction.
- Disability, Incapacity, or Health Issues– if a member of your family becomes disabled or incapacitated (whether that be you, your spouse, or an heir) your estate plan must be updated to accommodate that disability. Likewise, your estate plan may need to be updated to address any health issues that arise. Any significant change in your health status should prompt you to review your estate plan, at the very least.
- Changes in Your Financial Status– if you are making much more money and/or own more high-valued assets than you did when you last reviewed your estate plan, then it needs to be reviewed and updated.
- Tax Changes– you can’t predict what changes will be made to the tax code in the years to come. However, whenever there is a change in the tax code, you need to evaluate how it affects you and your estate plan and make the appropriate updates.
- Move to a New State– your estate plan should be written so that it works wherever life may take you. But, the laws governing estate planning vary from state to state. So, for example, if your estate plan was written while you resided in California, but you intend to live the rest of your life in Washington, you should restate your Will or revocable living trust with Washington-specific language to ensure that they remain valid and effective.
Contact An Experienced Estate Planning Attorney
Reviewing and updating your estate plan is the best way to make certain that it will actually do what you need and want it to do. Just as you consult with your physician, dentist, and account regularly, you should consult with your estate planning attorney regularly as well. For more information, contact us or sign up below for one of our events.