Having an estate plan is a great first step in protecting your assets – a step that 50% of Americans fail to take. To be most effective, an estate plan should also be reviewed periodically to make sure it meets your current goals. Below are a few general reasons to update your estate plan as discussed in a Forbes article titled, “8 Reasons to Revise Your Estate Plan Today”.
- While marriage will give your spouse some legal rights to your property, the provisions of your will or trust will should be updated to include your spouse. Also, a new estate plan will likely be needed if you now need to provide for children in a blended family.
- Similar to marriage, this change will likely change your estate planning goals and who you wish to receive your estate.
- Having children will change who you wish to be a beneficiary of your estate. Furthermore, children will likely require a more complex estate plan such as appointing a legal guardian to care for them until they are over 18 in case you die or become incapacitated.
- Serious illness or injury. If your loved one becomes disabled, you may want to change you estate plan. One example of this is a special needs trust which would allow you to provide for a loved one without disqualifying him or her from government benefits.
- Your estate plan should be designed to meet your estate planning goals such as how you want your assets divided and what kind of legacy you want to leave behind. If these goals change for any reason, you will likely want to modify your estate plan so it can best meet current goals.
- If you receive a sizeable inheritance, your old estate plan may no longer be sufficient to avoid estate taxes. The increased value may also change how you wish to divide your estate such as giving a portion of your assets to charity.
- New business. The purchasing of a business will require a business succession plan in addition to your traditional estate plan. Furthermore, if you sell your business you may want to revise your estate plan to account for the new capital.
- New state. Moving to a new state will at least require an estate plan review, if not an update. Rules and regulations are different across state lines and tax avoidance strategies may be different if you move. You should review your estate with an attorney in the new state to be sure your estate plan is still effective.