When Should I Update My Estate Plan?

When Should I Update My Estate Plan?

Creating an estate plan is one of the most important things you can do to protect and provide for your family in the future.  With a little bit of time and a skilled estate planning attorney, you can create a customized trust or will and estate plan that anticipates your unique needs and leverages the most advantageous use of your assets.

Whether it’s by providing for heirs, avoiding onerous taxes, overseeing property and real estate or creating charitable giving opportunities, an estate plan can lay out all of your current and future wishes in a neat and comprehensive document. To ensure the best results, you want to review and update your plan at regular intervals to make sure that it doesn’t become outdated or vague. If you’re wondering when you should update your estate plan, the answer is anytime you reach a big milestone in life, such as:

  • Getting married
  • Buying a house
  • Having children
  • Getting a promotion
  • Buying/selling a business
  • Getting divorced
  • Remarriage & stepchildren
  • Receiving an inheritance
  • Retiring
  • Death of a spouse.

How often should I update my estate plan?

We recommend a routine annual review of your estate plan. You can do this every January, on your birthday, or any other convenient time when you can set aside an hour on your calendar. This provides a quick check-up to make sure everything is in order.

For larger reviews, additions or even a significant overhaul of your estate plan, we recommend that you do this when your family grows, you make large purchases, or the size of your assets grows or changes. Consider the following:

Getting Married

Getting married is one of the biggest life-changing events. It can mean years of joy, and it also means a significant change in your future goals. Creating or updating an estate plan when you marry is important to ensure a solid financial future for you as a couple.

Buying a House

Purchasing a home is often the first major investment a couple or an individual makes. Real estate can be the single most valuable asset that families have, and you want to include in an estate plan instructions about how your house and/or land should be inherited.

Having Children

Updating your estate plan when you begin having children is important, because you will want to name guardians for minor children in the event that something happens to you. Guardianship decisions are critical, and this gives you time to consider your choices, have discussions with other adults and make plans.

Getting a Promotion at Work

This is something that often gets overlooked, but when you receive a promotion at work – especially if it includes stock options or future performance bonuses – this can be a good time to update your estate plan. You want to make sure that any future payouts take place even if you have passed away.

Buying/Selling a Business

If you buy, sell or own a business, you want to make provisions for this in your estate plan. That’s because business transactions not only impact your family, but they also impact your business partners.

Getting Divorced

While no one wants a divorce to happen, it’s prudent to consider the possibility in an estate plan. Some divorces can be messy, and all divorces have legal implications where assets and children are concerned.

Remarriage & Stepchildren

If you find new love and create a blended family through remarriage, it’s critically important to update your estate plan. A new spouse may have different ideas about investing, spending and burial plans than do your grown children from a first marriage. He or she may also bring their own children from a previous marriage into your new family, and you will want to discuss all of this and how it affects your estate.

Receiving an Inheritance

If a long-lost aunt or mentor leaves you a tidy inheritance, this is a great time to update your estate plan. You will want to include the inherited assets – whether real estate, money or collectibles – in your estate planning process.

Retiring

Retirement is the perfect time to update your estate plan, because your lifestyle is about to change dramatically. You may be travelling more, including international travel where you’ll be in different time zones and legal jurisdictions. Your source of income and investments may change during retirement, too.

Death of a Spouse

If your spouse precedes you in death, this is an important time to review and update your estate plan. Your spouse may have been named the beneficiary of your life insurance policy, pension and bank and brokerage accounts. Therefore, you will need to name new beneficiaries. You will also have to address the issue of co-ownership of assets like real estate, jewelry and artwork now that your spouse is no longer living.

Why is it important to keep your estate plan updated?

Avoiding probate and disputes

An ounce of planning is certainly worth a pound of cure when it comes to end-of-life issues.  All too often, people put off creating or updating an estate plan only to die unexpectedly without a viable plan in place.  This can mean going through a lengthy and expensive probate process.  Sometimes, particularly when a family member passes away without a trust or will, disputes can arise that must be litigated.

By updating your estate plan regularly, you can minimize any vague or outdated language and reduce the likelihood that surviving family members will bicker or challenge the validity of your trust or will in court. Updating your estate plan regularly also gives you the chance to talk to your heirs while you’re still alive, explain your decisions and reasoning, and prepare them so there are no unexpected surprises or hurt feelings in the future.

Contact a Skilled Estate Planning Lawyer Today

The estate planning attorneys at Birk Law Firm have decades of experience crafting customized plans that meet every family’s unique needs. Whether young or old, you can benefit from an estate plan. You don’t have to be rich or own expensive assets to craft a meaningful will or trust. To find out more about how Birk Law Firm can help you plan for your future, call us for a free initial consultation at 573-332-8585.