Creating an estate plan is not a one-time event. You should review your plan periodically, to ensure it is up to date, and make necessary changes if your personal situation changes. There are a number of life-changing events that require your plan to be revised, including:
Change in Marital Status: If you have were recently married or divorced, it is imperative that you review and modify your plan. With a new marriage, you must determine which assets you want to pass to your new spouse or step-children, and how that may relate to the beneficiary interest of your own children. Following a divorce, it is a good idea to revise your plan, to formally remove the ex-spouse as a beneficiary, and also change your beneficiary on any life insurance policies, pensions, or retirement accounts.
Estate planning is complicated when there are children from multiple marriages, and an attorney can help you ensure everyone is protected. If one of your beneficiaries experiences a change in marital status, that may also trigger a need to revise your plan.
Births: Upon the birth of a new child, the parents should amend their plan immediately to include the names of the guardians who will care for the child if both parents die. Also, parents or grandparents may wish to modify the distribution of assets provided in their plan, to include the new addition to the family.
Deaths or Incapacity: If any of the named executors or beneficiaries of a plan, or the named guardians for your children, pass away or become incapacitated, your plan should be revised accordingly.
Change in Assets: Your plan may need to be changed if the value of your assets has significantly increased or decreased, or if you dispose of an asset. You may want to modify the distribution of other assets in your estate to account for the changed value or disposition of the asset.
Change in Employment: A change in the amount and/or source of income means your plan should be examined to see if any changes must be made to that document. Retirement or changing jobs could entail moving to another state, thus subjecting your estate to the laws of that state when you die. If the change in income modifies your investing, saving or spending habits, it may be time to review your plan and make sure the distribution to your beneficiaries will be as you intended.
Changes in Probate or Tax Laws: Estate Plans should be drafted to maximize tax benefits, and to ensure the decedent’s wishes are carried out. If the laws regarding taxation of the estate, distribution of assets, or provisions for minor children have changed, you should have your plan reviewed by an estate planning attorney to ensure your family is fully protected and your wishes will be fully carried out.
Posted in: Estate Planning