It’s always great to know that your loved ones will be taken care of financially if something happens to you. However, having an estate plan for this purpose is simply not enough. It’s important to review and update your estate plan regularly to ensure that it still meets your needs and the needs of your family.
Adding a child to your family
Whether it’s through adoption, birth or marriage, adding a new family member is a common reason to update your estate plan. You’ll want to make sure that they are included in your will and that you have appointed a guardian for them in the event that something happens to you. If you have a trust, for instance, you’ll need to add them as a beneficiary.
When you move to a new state
This is another reason to update your estate plan because different states have different laws governing estate planning. For example, some states have estate taxes while others do not. You’ll want to make sure that your estate plan complies with the laws of your new state. You wouldn’t want, for instance, your beneficiaries to have to pay estate taxes that could have been avoided had you updated your estate plan.
When your financial situation changes
If you experience a significant change in your income or assets, you’ll want to update your estate plan accordingly. For example, if you have a trust and your assets increase significantly, you may need to adjust the terms of the trust so that it continues to meet your needs.
When you get divorced
It’s common for married couples to have estate planning documents that name each other as beneficiaries. However, if you get divorced, you’ll need to update your estate plan to remove your ex-spouse as a beneficiary. Otherwise, they may still inherit a portion of your estate even though you no longer want them to.
Updating your estate plan may seem like a daunting task, but it’s important to do it to ensure that only those you want to inherit your estate actually do. Just remember to follow the right steps to make sure that your estate plan gets updated correctly and legally.