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Is your estate plan stuck in the past? Top reasons for a tune-up

On Behalf of | May 31, 2024 | Estate Planning

Life is a journey filled with changes. New jobs, marriages, children and even relocations can significantly alter your life’s landscape. Yet, many people create an estate plan and tuck it away, assuming it will remain eternally relevant. However, just like your car needs regular maintenance, your estate plan also requires periodic review and updates.

Here are some common reasons why you might need to revisit and refresh your estate plan:

Life transitions: New additions and departures

Your family may also change with time. You may want to consider updating your estate plan for changes in your family, such as:

  • Family changes: Birth, adoption, marriage or even divorce can significantly impact your wishes regarding asset distribution and guardianship designations. An outdated plan may not reflect your current family dynamics.
  • Loss of a beneficiary: If a designated beneficiary named in your will or trust has passed away, you’ll need to update your plan to reflect your current wishes.

New additions to the family, like grandchildren, can also be included in your estate plan.

Shifts in assets and finances

Just as you change as you grow older, so does your financial situation, including your assets. While minor changes may not necessitate a change to your estate plan, others may, including:

  • Acquisition of new assets: Significant purchases like a new home or investment property should be factored into your estate plan to ensure proper distribution after your passing.
  • Changes in debt: Fluctuations in your financial situation, such as paying off a mortgage or acquiring significant debt, can impact your estate’s value and require adjustments to your plan.

It is also crucial to regularly review beneficiary designations on retirement accounts and life insurance policies, as these designations may supersede your will.

Legal and tax landscape updates

The laws are constantly changing. These may be in your favor or may mean you need to make changes to your estate plan to consider:

  • Changes in estate tax laws: Federal and state tax laws can evolve. An outdated plan may not take advantage of current tax-saving opportunities or leave your heirs with a higher tax burden.
  • New laws and regulations: Estate planning laws and regulations can change, potentially impacting the validity or effectiveness of your existing plan.

Consulting with an estate planning attorney periodically lets you stay updated on any legal or tax changes that might affect your plan.

Personal re-evaluation: Aligning your wishes with your values

Your values and priorities might evolve over time. Reviewing your estate plan can ensure it aligns with your current wishes regarding asset distribution and charitable giving.

If you experience a significant health change, you may need to update your healthcare directives, such as your living will or power of attorney for healthcare.

Your estate plan is a reflection of your wishes. A periodic review allows you to ensure it continues to represent your values and intentions.

Taking action: Scheduling your estate plan tune-up

Be sure to revisit your estate plan before a major life event. Schedule regular reviews with your estate planning attorney, ideally every 3-5 years. This proactive approach ensures your plan remains effective and reflects your current wishes.

By taking these steps, you can have peace of mind knowing your loved ones will be cared for according to your desires, even as your life unfolds.