Navigating Life Changes – When to Update Your Estate Plan

What’s changed in your life recently? Everyone I talk to lately seems to be navigating some type of life change. Some of the changes are positive, like marriage, new career opportunities, moving into dream homes, or the birth of a child. Others are dealing with heavier transitions, like financial hardships, health issues, or loss of a family member or a job. When facing life’s uncertainties, sometimes it’s best to get back to the basics. Confirming that you have your finances in check and your estate plan up to date can provide peace during tumultuous times.

Estate planning ensures that your wishes regarding the management and distribution of your assets are carried out in the event of your death or incapacitation. It also involves setting up a plan to take care of those who depend on you. Here are some key milestones and circumstances that signal it’s time to revisit your estate planning documents:

Major Life Events or Changes to Family Unit

Changes to your marital status or health will likely impact your estate plan. Marriage, divorce, or the birth or adoption of a child can significantly impact how you want your assets distributed. Other examples include a family member passing away, children attaining adulthood, and illness or disability of a family member. Update your estate plan to reflect these changes and provide for your loved ones accordingly.

Change in Financial Status

A major part of estate planning depends on the types and sizes of assets you own. A substantial change in your finances, whether positive or negative, may warrant adjustments to your estate plan. Examples of financial events include purchasing or selling property or a large asset, borrowing a large amount of money, experiencing large increases or decreases in the value or investments, or receiving an inheritance.

Relocation

Moving to a new state or country can have legal implications for your estate plan. Estate planning laws are state-specific, meaning that different states and jurisdictions have varying laws regarding wills, trusts, and inheritance taxes. It’s a good idea to have your plan reviewed in your new state.

Changes in Health

A decline in your health may prompt the need for additional provisions in your estate plan, such as healthcare directives, living wills, or assigning power of attorney. This ensures that your medical and financial affairs are handled according to your wishes if you become incapacitated.

Changes in Relationships

If your relationships with beneficiaries, executors, guardians of minor children, or trustees change over time, it’s essential to update your estate plan. This can help avoid potential conflicts and ensure that those responsible for carrying out your wishes are still the best fit.

Tax Law Changes

Federal and state estate tax laws may change over time. Developing a relationship with a knowledgeable tax professional and checking in from time to time, is important to ensure your plan is structured to take advantage of any applicable estate tax exemptions or other tax planning opportunities.

Evolving Business Ventures

If you own a business, your estate plan should reflect any changes in the business structure or ownership. Succession planning is crucial to ensure a smooth transition of business assets in the event of your passing.

Even in the absence of major life events, it’s advisable to review your estate plan periodically. Laws may change, family dynamics can evolve, and your financial goals may shift. Regular reviews ensure that your plan remains up to date and aligned with your current intentions. An estate plan is not a one-time task but an evolving document that should adapt to the changes in your life. Regular reviews, especially during significant life events, will help you maintain a comprehensive and effective estate plan that truly reflects your wishes.

Whether you’re starting from scratch or seeking a comprehensive review of your existing documents, we can work with you to develop a plan that provides peace of mind in safeguarding your financial future and securing your family’s well-being.

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