It would be convenient if an estate plan was something you could just create and then forget about. Unfortunately, your estate plan needs regular maintenance to ensure it is still ready to accomplish your goals.
Many personal changes in your life should prompt you to update your estate plans. We describe some of the most common events here, but any significant change in circumstances could have a critical impact on your plans and give you a good reason to call your attorney.
- Marriage or Divorce – If you or one of your beneficiaries changed marital status, you need to review and revise your estate plan. The laws often make some automatic changes that may not align with your goals. For instance, if your will left money to your husband’s sister, a divorce could cancel that bequest. To keep it intact, you may need to adjust your documents to state that you still want her to receive a bequest despite the divorce.
- Buying or Selling a Home – Real estate transactions often drastically affect the value and liquidity of an estate. This might be the right time to establish a revocable “living” trust, especially if you own property in two different states. The trust would allow you (and your spouse, if applicable) to avoid probate in each state where you own real property.
- Starting or Selling a Business – Your estate plan should coordinate with your business succession plan to preserve the value of the business, minimize tax consequences, and provide for continued operation during any transitions in leadership.
- Adding a Child – Make sure your will, trusts, and accounts with beneficiary clauses all provide for the new child the way you want.
- Inheriting Property or Opening New Financial Accounts – Your estate planning attorney develops your plan based on the information you provide, including your list of current accounts. If you inherit or add an asset, or if you open a new account, it is a good idea to check with your attorney to see if you need to make adjustments to your plan.
- Moving to a New State – Your existing estate planning documents will probably still be valid when you move to a new state, but they may or may not operate the way you intended. This is a good time to schedule a consultation with your estate planning attorney to make sure your plan will still be able to accomplish your goals.
- Death or Mental Incapacity of Someone with a Critical Role – If your executor, trustee, or someone else involved with carrying out your estate plan passes away or becomes mentally incapacitated, you should update documents to appoint new individuals to fill those roles. In the case of a beneficiary’s death or mental incapacity, you will want to discuss how this would alter your desired distributions.
- Medical Condition – A new diagnosis or injury can change your perspective on future plans. It is a good time to consider changes and ensure that you have the right powers of attorney and other documents in place to protect your interests.
- Change in Goals – Our desires and goals change as our lives evolve. If you realize that your attitude toward certain goals has changed, it is probably time to change your estate plan to match.
Review Your Plans with an Advisor from Anderson Estate Planning
You may not be certain whether a change in your life requires an amendment to your estate planning documents. Or maybe you’re not sure whether you have all the documents you need to protect yourself and your family in case of incapacity or other emergencies.
The experienced team at Anderson Estate Planning would be happy to review your existing plans to determine whether you need to make adjustments. Call us to schedule a confidential consultation.