Once you’ve established an estate plan, it’s easy to put it away in a file cabinet or lockbox where you never have to think about it again. After all, the only people who care about what’s in the documents are your heirs. Yet, that’s precisely why you have to review your estate plan regularly.
Your life can change drastically between the time you put together the estate plan and the moment your beneficiaries start dividing your assets. If you don’t update the documents to reflect what happens in your life, your beneficiaries may be in for a few surprises. You can avoid this—and ensure your true last wishes get carried out—by updating your estate plan after major life changes.
Birth or Adoption of Child or Grandchild
As you welcome new family members, your estate plan also grows. You should choose a guardian who will take care of your child if something unexpected happens to you. This is a good time to check your life insurance coverage to make sure your family has enough money to take care of expenses if they lose your income. You may also want to set up a 529 plan to cover education costs or a trust to manage your assets in your absence.
Divorce or Death
Losing family members also affects your estate planning needs. After a divorce or death, it’s time to review these documents. Married people tend to select their spouses as their beneficiaries on their insurance policies and retirement accounts. If you fail to update them, your former spouse can end up receiving assets you want to go to other people—even if you both remarry. You may also discover that you don’t need as much life insurance after your spouse dies, especially if you don’t have any dependents.
Estate laws vary from state to state. If you move, you should speak with an estate planning attorney in your new state. The attorney can review your documents, explain the state’s estate laws and help you update your plan so that it’s compliant with the new law. For example, the new state may have different laws governing who can be a witness to your will or who can be your beneficiary. You may need to choose a new guardian for your minor children.
If you have questions about estate planning, give us a call. We’re here to help you do what’s necessary to protect your family and your wealth through all of your life’s changes.