After creating your estate plan, you may have found no need or reason to review it. Yet, if you have let yours sit for years, it may no longer reflect your assets, beneficiaries or intentions. Failing to update your plan could create discord among your loved ones once you pass. To avoid this outcome, you must understand what occasions call for your estate plan’s revision.
Major events require updates
As a rule of thumb, you will want to update your estate plan soon after major events happen in your life. These events could be personal and may affect your relationship with a beneficiary. They could also be financial and may impact your net worth or the makeup of your assets. By acknowledging these changes, you can keep your assets from ending up in the wrong hands. And you can prevent confusion about your estate’s value and contents once it disburses.
You may want to update your estate plan if:
- Your marital status – or the marital status of a beneficiary – changes
- A beneficiary’s financial circumstances change
- You become a parent or grandparent
- Your child turns 18 and no longer needs a guardian
- A beneficiary – or your estate’s administrator – dies
- You become estranged from a beneficiary or your estate’s administrator
- You open or close a business
- You acquire or sell major assets
- Your assets experience a major increase or decrease in value
- You move states or purchase a home in another state
Periodic updates can pay off
When few events happen in your life, you will still want to update your estate plan periodically. To keep your plan current, make sure you review it once every three to five years. Revisiting your plan regularly allows you to make sure your intentions remain the same as when you created it. If you have changed your mind about these, or if you forgot to add certain assets to your plan, these reviews give you an opportunity to do so.
Keeping your estate plan current may sound like serious work. But refreshing it as needed may save you and your beneficiaries from unnecessary headaches. An estate planning attorney can help you evaluate the strength of your arrangement.