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Many clients will ask the question, “When should I update my estate plan?” The answer is usually, whenever something big happens in your life.
All too often, clients will execute a Durable Power of Attorney, a Health Care Proxy, a Living Will, and a Last Will and Testament and believe they no longer need to think about the plan since they feel they have all the documents they need. They go on their way and live their lives and, throughout the years, different events may happen that can significantly impact their estate plan.
Here are some of the more common events that should make you think it is time to review your planning:
- “Life” – The birth of a new loved one. If a new child or grandchild is born, you should have your estate plan reviewed by your attorney to make sure that the newest addition to your family is properly considered.
- “Death” – Unfortunately, there may be a death of a loved one after you have created your estate plan. This death may impact your estate plan in a number of ways, i.e. testamentary scheme, your beneficiary designations, or tax planning. It is important to discuss the passing of a loved one with your attorney, especially if the person who died was a key player in your estate plan, such as a spouse.
- “Illness” – An illness, especially one that may require long term care should create an immediate sense of urgency in having your plan reviewed. Timing is often critical in situations like this and important steps may need to be taken quickly.
- “Marriage” (or “Remarriage”) – If you are planning to get married then you should review your estate plan with your attorney before you tie the knot to discuss the impact the marriage may have on your estate plan. This is especially true if it will be a second marriage and you both have children. If one of your loved ones is getting married or has gotten married and you are concerned about the new in-law then you should discuss your estate plan with your attorney to make sure your assets are protected for those who you intend to leave them to.
- “Divorce” – Getting divorced will significantly impact your estate plan. You should contact your attorney prior to the divorce to make sure you are protected during the process of your divorce and once it is finalized. The divorce of a family member such as your child may also require a review of your estate plan. Although not common, some clients will include in-laws as part of their planning and it is likely that a divorce would change that.
- “Taxes” – If your assets have significantly appreciated or depreciated in value, then the tax strategy involved in your estate plan may need to be re-evaluated accordingly.
- “Time” – If it has been several years since you implemented your estate plan you should contact your attorney for a “check-up”. For example, you may not know that a law has changed that impacts your estate plan.
- “A Move” – if you move to a new state, you should have your estate plan reviewed as state laws differ when it comes to estate planning documents. You need to make sure your documents are sufficient or if changes need to be made to meet state law requirements.
Creating an estate plan is important to preserve your dignity and make sure that your assets are protected for you and your loved ones in the event “life happens”. It is not only necessary to establish your estate plan, but also to follow up with your attorney periodically or after a major life event to make sure the plan is still appropriate.