Change is the only constant in life, which also applies to our personal lives. As we go through different stages and experiences, our priorities, values, and circumstances may shift. This can also impact the way we want to distribute our assets and make decisions for ourselves in the future. As such, it is important to regularly review and update your estate plan to ensure that it reflects your current wishes and needs. Brad Dozier will discuss the key life changes that may prompt you to update your estate plan and how to do so.
Marriage or Divorce
Marriage is a major milestone in one’s life, and new legal rights and responsibilities come with it. Once married, your spouse may become the default recipient of your assets, regardless of what is stated in your will. Therefore, updating your estate plan to include your spouse and making any necessary changes is important.
On the other hand, divorce can have a significant impact on your estate plan as well. If you do not update it following a divorce, your ex-spouse may still be entitled to receive a portion of your assets and make decisions on your behalf. To avoid this, revising your estate plan after a divorce is crucial to remove your ex-spouse and designate new beneficiaries.
Birth of Children or Grandchildren
The arrival of a new family member is another life event that should prompt you to review your estate plan. This includes not only the birth of children but also grandchildren. You may want to change your will or create a trust to provide for their future and ensure that they are taken care of in the event of your passing.
Additionally, you may also need to designate guardians for minor children in case both parents pass away. It is important to discuss this with the potential guardians beforehand and update your estate plan accordingly.
Changes in Financial Situation
Your financial situation may also change over time, affecting your estate plan. For example, if you experience a significant increase or decrease in assets, it may be necessary to adjust the distribution of your estate. Similarly, changes in tax laws or economic conditions may also impact your estate planning strategies. Regularly reviewing and updating your estate plan can help ensure that it remains effective and efficient in achieving your goals.
Changes in Health
As we age, our health may deteriorate, or face unexpected medical conditions. This can result in changes to our mental or physical capacity, making it crucial to review and update our estate plan accordingly. In the case of a serious illness or disability, it is important to have documents such as a power of attorney and healthcare directives in place. These allow trusted individuals to decide if you cannot do so yourself.
Relocation to a New State
If you have recently moved to a new state, it is important to review your estate plan, as laws may differ from state to state. For example, community property states have different laws regarding the distribution of assets between spouses in the event of death. Updating your estate plan to comply with your new state’s laws can help ensure that your assets are distributed according to your wishes.
Death of a Loved One
The loss of a loved one can be a difficult and emotional time, but it is also important to update your estate plan following such an event. If the deceased was a beneficiary or executor in your will, it may be necessary to make changes to reflect their passing. Inheriting assets from a loved one’s estate may affect your estate planning strategy. Reviewing and updating your plan is important to ensure that your assets are distributed most effectively.
Conclusion
Life is constantly changing, and reviewing and updating your estate plan regularly is important. Marriage, divorce, birth of children or grandchildren, changes in financial situation or health, relocation, and death of a loved one are just a few examples of major life events that should prompt you to review and update your estate plan. By keeping your estate plan up-to-date, you can ensure that your wishes are carried out and your loved ones are cared for in the future. Regularly consulting with an attorney or financial advisor specializing in estate planning is also a good idea to ensure your plan remains effective and aligned with your goals.