You may already be ahead of the game if you have an estate plan in place. You have taken the first step toward keeping your family and assets safe. Now that you have crossed off a significant life goal from your to-do list, there is no reason to worry. Right? Well, almost!
You have worked hard to craft a plan that will help you care for your loved ones and carry out your wishes after you’re gone. Even so, your estate plan, like most things you own, needs regular maintenance to continue functioning properly. That’s why it is important to revisit and update your estate plan on a regular basis. You may need to make changes to your estate plan to reflect the changes in your family structure, life events, finances, the law, or other circumstances.
In this article, we will take a look at some of these changes and other factors that may influence your estate plan and cause you to consider making some necessary updates.
1. Changes In Family Circumstances
Significant changes to your immediate family are usually a good reason to evaluate your estate plan to determine if it still accurately reflects the current situation and your original intentions. For example, was there a marriage, divorce, birth, or adoption among family members? These changes may necessitate an update to your will and other estate planning documents to accurately reflect the changes. Perhaps you have been blessed with another child or a grandchild that was born or was adopted, and now you would like to pass on some of your inheritance to them.
In the same way, grief and conflict can arise when a family member passes away or a divorce occurs. Reviewing your estate plan for necessary revisions may be helpful to alleviate some of the dissent among family members. Perhaps your ex was listed as a beneficiary, but you no longer wish for them to receive benefits through your estate plan.
Paying attention to the changes in your family will allow you to think ahead so that your intentions will be fulfilled when you pass away. Depending on the situation, you may need to alter who your beneficiaries are or make additions or changes to what your beneficiaries receive. Regular estate planning modifications need to be made to keep up with changes in your family. Your estate planning documents will need adjustments to make sure your wishes will be met after you pass away.
2. Changes In Financial Situation
Your financial status is likely to change over the course of your lifetime. For example, you could come into money or suffer a financial hardship. Any changes to your financial situation can affect your ideas about dividing your estate among your beneficiaries after your death. Let’s say your financial situation improves and you come into a large amount of money. You can add additional beneficiaries or adjust your distribution percentages. If your financial situation worsens, you might need to explore strategies to protect your assets and ensure that your wealth is distributed accordingly.
By keeping your estate plan updated, you can protect your financial health and the wellbeing of the people you love. Anyone making revisions to their estate plan should consult with an experienced estate planning professional to determine any tax implications. Do not neglect to periodically review your estate plan, especially if there are major changes to your financial situation. By making sure your will is current and reflects your financial life in the present, you can sleep easy knowing your legacy is protected.
3. Changes In Asset Ownership
When you think about updating your estate plan, you need to account for any changes in asset ownership, meaning any newly acquired property or investment you might want to account for in your plan. By making such updates, you ensure your assets are truly reflected in your estate plan, and accounted for properly. You might be tempted to ignore newly acquired assets or properties, perhaps as part of an effort to streamline your plan, but doing so could mean a significant asset is omitted, and could leave your loved ones confused and disputing.
Sometimes, acquiring a new home, a new investment portfolio, or a new insurance policy might mean making some major changes to your plan, especially if those assets exceed your estate’s tax-free limit. By regularly maintaining an up-to-date plan, you’ll ensure clarity and ease-of-mind about where your assets go, or perhaps provide you an opportunity to change your plan and make different choices. If the assets are split in a certain way, are there specific instructions or preferences that you forgot to take into account? It is possible that your loved ones will have to guess about something you would have liked to be clear if you never planned, re-planned, or updated your estate plan.
4. Changes In Beneficiaries And Guardians
Before anything else, make sure that your estate plan makes sense and still reflects your wishes. This will protect your assets and the people who depend on you. From time to time, you may need to change your will or trust. Certain events could lead to disagreements between beneficiaries or guardians, the family structure could change, or new people or older beneficiaries could be added or taken away. This kind of change could indicate that your provisions no longer accurately represent your desires.
You can maintain control of your affairs if you regularly revise your will. You may need to change beneficiaries, assign guardians for minor children, or divide your inheritance according to current family dynamics. Reviewing and updating your estate plan on a regular basis can also help keep your beneficiaries from fighting after you die. If they do fight, you can lessen the damage by limiting their ability to sue.
Arguments between family members over your estate can happen even after you are dead. Divorce or some other kind of separation from a guardian or beneficiary could lead to issues. It is critical to anticipate potential life events and plan for them in your estate plan. Your life objectives may shift as a result of the inevitable changes that occur in both life and people. For your estate plan to be as beneficial as possible, it must reflect your current desires.
5. Changes In Personal Preferences
As time goes on, your values, desires, and aspirations may change. Something you might have valued in the past, you might not feel holds that same importance in the present. It is important that you recheck and update your estate plan to make sure it is still aligned with your values and your objectives.
Certain charitable causes and organizations may become more important to you over the years than they were when you first established your estate plan. Perhaps someone dear to you has recently been diagnosed with an illness, so any foundations helping to treat or cure that illness may become more important to you than they were previously.
Your estate plan is supposed to be a reflection of you and the things that you treasure most. Make sure that your estate plan reflects your wishes and will leave a legacy that truly represents you and your identity.
6. Changes In Laws And Regulations
Remember to keep yourself updated on the ever-changing estate planning laws if you want to make the most of them. Make sure your plan is up-to-date with all the latest legal requirements by reviewing it regularly. Tax and probate laws can cause outdated estate-planning documents to fail. The best estate plans make use of every available resource. You need to keep your estate plan up to date as laws, especially tax laws, change so that your beneficiaries pay less in death taxes. Review and update your estate plan regularly, especially when laws change, to ensure it meets your needs.
An experienced estate planning attorney can advise you on the latest legal changes and how to update your estate plan. They can regularly review and update your estate plan, ensuring that it consistently reflects your wishes and serves its intended purpose. This way, you can trust your estate plan to protect your loved ones after you die.
Is It Time For An Update?
You should review your estate plan at least every three to five years, depending on your circumstances, but modifications may be necessary sooner if you get married, divorced, have children or adopt, or experience a change in your finances. A discussion with your estate planning attorney will help identify when your plan needs an update. If you have not already created an estate plan or have questions about your existing plan, give Osenton Law, P.A., a call today to schedule a free consultation.
