Your estate plan should not be something you create once and then forget about. Your life is filled with meaningful changes, and your estate plan should change with it.
Many people make a routine of reviewing their estate plan every few years. However, some life events may warrant a professional review of your plan outside of your normal routine.
You moved to another state
Estate planning laws can vary from state to state, so when you move across state lines, you should have your estate plan reviewed and updated. Some of the differences in laws can affect the validity of your documents. For example, there may be a difference in the number of witnesses needed to sign your will. Other times the differences may require a different estate planning strategy altogether. For example, you may need to plan your estate differently to minimize estate taxes in your new state.
Your assets or liabilities change
When you take on more debt, purchase more assets or sell off assets, you should have your estate plan reviewed. All of these actions change the composition of your estate, which needs to be reflected in your estate plan. This is especially important for assets that make up a large part of your estate, such as a business or real estate.
Your family changes
Family changes should also instigate a review of your plan. This includes when you get married or divorced, when a child or grandchild is born into the family and when a loved one who is named in your estate plan dies. These changes can affect who your beneficiaries are, how your assets will be divided and who is named to take on certain responsibilities on your behalf.
You may also want to update your plan for some changes that may occur in your loved one’s lives. For example, if you do not trust your daughter’s new husband, you might reconsider how your daughter would receive her inheritance. As another example, your son may have moved away for work, which might mean he is no longer the best choice to serve as your attorney-in-fact in a power of attorney.
It is important to make sure that your estate plan keeps up with every major change you experience in your life. To be as effective as possible, your estate plan should always reflect your current situation and your current wishes.
