An estate plan ensures your wishes are honored and your loved ones are cared for. However, life is full of changes, and your estate plan should reflect these changes.
6 potential reasons that may require an updated estate plan
Typically, reviewing your estate plan once or twice a year is recommended. You may want to update your estate plan is every three to five years or if significant changes may necessitate an update to your estate plan. Ignoring these changes can lead to accidental consequences and complications for your heirs. Here are some key reasons to review and update your estate plan:
- Marriage or divorce: Changes in your marital status can significantly impact your estate plan. You may need to add or remove a spouse as a beneficiary.
- Birth or adoption of a child: Adding a new member to your family means updating your plan to include guardianship and financial provisions for your child.
- Death of a beneficiary or executor: If one of your estate’s beneficiaries or executors dies unexpectedly, you must update your records.
- Significant changes in assets: Acquiring or selling significant assets, such as a home or business, requires adjustments to your estate plan.
- Changes in state or federal laws: Estate planning laws can change, affecting tax implications and other legal considerations. It is crucial to keep your plan compliant.
- Health changes: A serious health diagnosis or a decline in health may prompt updates to your healthcare directives and power of attorney.
Reviewing and updating your estate plan during these events ensures it remains accurate and effective.
Why you need an estate plan
An updated estate plan is vital for several reasons. In addition to fulfilling your wishes after your passing, it also minimizes potential conflicts among your heirs by providing clear instructions and reducing doubts.
Furthermore, an updated estate plan may help avoid complications, such as probate delays or unexpected taxes, ensuring a smoother process for your loved ones. Make it a habit to review your estate plan every few years or after any kind of major life event to maintain its effectiveness and relevance.
