Life is full of big changes—some exciting, some unexpected—each with the potential to impact your estate plan. Major life events, from changes in marital status to financial shifts, can alter your wishes, legal responsibilities, and the distribution of your assets. Failing to review and update your estate documents accordingly might mean state laws or outdated instructions decide what happens to your assets. The following are key moments to review your estate plan:
Becoming a Parent
Welcoming a new child is a joyous occasion—one that definitely calls for updating your estate plan. Ensuring your children are financially protected and that guardianship designations are clear in case of an emergency is crucial. An updated estate plan can safeguard their future, providing peace of mind for you and your family.
Moving to a New State
Relocating to a new state? It's important to recognize that estate planning laws vary from state to state. This move might necessitate updates to your will, trust, or other essential documents. Consulting local estate planning experts can ensure your plans comply with your new state’s legal frameworks.
Getting Married or Divorced
Whether tying the knot or going through a divorce, changes in your marital status have significant implications for your estate plan. Marriage might require updating beneficiaries and other legal designations to reflect your new union. Conversely, divorce requires immediate attention to prevent unintended beneficiaries, such as an ex-spouse, from inheriting your assets.
A Significant Change in Assets
A significant shift in your financial status, whether through receiving an inheritance, starting a business, or experiencing economic adversity, should prompt a reassessment of your estate planning goals. Adjusting your plan to align with your current financial reality ensures your wishes are accurately represented.
Death of a Beneficiary or Executor
When someone named in your estate plan passes away, it’s necessary to update your designations. This ensures your assets are distributed according to your most recent wishes and prevents any potential legal disputes or misinterpretations.
A general rule of thumb is to review your estate plan every three to five years, or anytime you experience one of these significant life changes. Seeking professional estate planning guidance can help navigate these adjustments smoothly. Consulting with an estate planning attorney is highly recommended if you have any questions or wish to discuss your situation further. Remember, proactive planning today is the best assurance of your estate being managed according to your wishes tomorrow.