Estate planning is essential in securing your financial future and protecting your loved ones. However, creating an estate plan is more than just a one-and-done task. Your estate plan should evolve with your life changes. It is essential to know when you should consider updating your estate plan to ensure it remains aligned with your wishes.
Update your estate plan when you have major life events
Ideally, you must review and update your estate plan whenever you experience significant life changes. These events can include:
- Marriage or divorce
- Birth or adoption of a child
- Death of a spouse or beneficiary
- Substantial changes in your financial situation
- Relocation to a different state
For instance, a recent marriage may make you want to include your spouse in your will. You may also want to name them as your healthcare proxy. Similarly, a divorce might require removing your ex-spouse from your estate plan and designating new beneficiaries.
Your estate plan should reflect changes in laws or regulations
Estate planning laws can change over time, potentially affecting the validity or effectiveness of your current plan. It may be wise to stay informed about legislative updates impacting your estate.
For example, changes in tax laws might affect the strategies you have implemented for minimizing estate taxes. Knowing these changes can help you maintain an efficient and legally sound estate plan.
Why you should regularly review your estate plan
Even if you do not have any major life events or there are no significant legal changes, it may still be beneficial to review your estate plan periodically. You may want to revisit your plan every three to five years.
Consider whether your current plan reflects your wishes and circumstances during these reviews. Are your chosen executors and guardians still appropriate? Do your asset allocations still make sense? Regular check-ins can help you catch outdated information or preferences that have changed over time.
Keeping your estate plan up-to-date can help prevent potential conflicts among your beneficiaries. Consulting an attorney to guide you through the process can help you achieve peace of mind.