Every adult needs to have an estate plan in place that outlines their wishes for their end-of-life care and their assets after they pass away. While creating an estate plan may not be a pleasant activity, it’s one that’s critical because it provides valuable information for your loved ones and can help to ensure that your wishes are honored.
Creating an estate plan isn’t a one-and-done event, however. Instead, it is a process that can evolve over time. This approach helps to ensure that it always reflects your current wishes. As such, knowing when it’s time to update your estate plan is critical.
Changes to tax or estate planning laws
Some events that will inspire a need to update to your estate plan will stem from things out of your control, like changes in tax laws and estate planning regulations. It’s critical to ensure that you work with someone who can help you to stay abreast of those changes so your estate plan can always reflect your wishes in a legally enforceable manner.
Financial changes
Certain financial changes, such as buying or selling assets, requires an immediate estate plan review. You must ensure that all your assets are accounted for in your estate plan and that any assets you no longer have are taken out of its terms.
Major life events
Significant life changes signal a need to review your estate plan. Getting married or divorced or having or adopting a child are good reasons to update your estate plan. You also need to update it if anyone named in the estate plan passes away. Changes in family dynamics may mean that you need to adjust your beneficiary designations as well.
Even if you don’t have any life events or other changes that require an update to your estate plan, you should plan on reviewing it every three to five years. This will give you a chance to ensure that you don’t miss any changes that you should make. It may behoove you to work with someone familiar with these matters so they can assist you with handling necessary updates efficiently and effectively.
