Once you make an estate plan, you might file it away and forget about it. Yet failing to update it will create problems for your family when you die. You need to revisit it regularly and make changes when needed.
Reasons to update your estate plan
Here are some of the most common life events that require you to update an estate plan
- You move: If you change states, check to see if your estate plan will still be valid. You may need to make alterations to comply with laws in your new state of residence.
- Marriage or divorce: Entering a marriage will mean not everything you own is entirely yours from now on. Your spouse will gain automatic rights to some of your assets should you die. When you divorce, you will probably lose some assets.
- The birth of a child: An estate plan where you leave everything to your beloved first child is great — until a second one is born. If you fail to add them to the list of beneficiaries it could create issues between siblings.
- The birth of grandchildren: Once you have grandchildren, you may wish to leave them something, too. Many grandparents choose to create trusts. It allows you to leave them something, even if their parents fritter their inheritance away.
- Changes in the assets you own: The wealth you have will change over time. Some things go up in value; some go down. You will sell or lose some assets and gain others.
- Executors or trustee changes: When you name an executor or trustee, you hope they will outlive you. If one dies or is no longer mentally capable of carrying out their role, you need to replace them.
Once you make your first estate plan, it only takes a few minutes to check it over each year and ensure it is current.