It’s a good idea to periodically review your estate plan to see if updates are needed. They may not be during every review. For instance, some people who review their plan every year or every two years may not to make updates every time that they check to make sure that their documentation accurately reflects their wishes and circumstances.
But conducting a review regularly is still important because you don’t want to accidentally allow the plan to become outdated so that it doesn’t accurately address your family or your assets. As such, it’s important to also consider key life events as cues to review your estate plan earlier than your regularly-schedule review may allow for.
Your marital status changes
First and foremost, if anything about your marital status changes, your estate plan needs to be altered to reflect it. This could include getting married, getting divorced and getting remarried.
Your intended beneficiaries change
Additionally, if there are major changes to your family you may need to newly include or exclude certain individuals. For example, it could be that a beneficiary passes away before you do and they have to be removed from the estate plan. But the opposite example could be if a child or a grandchild is born and needs to be added in. Families are always changing and estate plans should reflect an individual’s most current reality.
Your assets change
Finally, you’ll want to keep a close eye on your assets for any major changes. This doesn’t mean that every bank account transaction requires an update. But if you sell major assets, like a home or a business, your plan may need to be altered. This is also true if you acquire significant assets, such as winning the lottery, getting an inheritance from your parents or simply increasing your own income as your career progresses. Assets need to be accounted for and distributed properly, so changes in either direction require updates to your plan.
Do you need to make an update or draft an estate plan?
If these life events occur, it may be time to review your plan – or to draft a plan initially, if you don’t have one yet. Most people don’t. Make sure you know what steps to take, when necessary, by seeking legal guidance, as updating your plan in certain ways could leave your legacy as vulnerable as if you hadn’t drafted an estate plan at all.
