At first, estate planning can seem a bit much. It can be hard to know where to start and what all you need to know. But once you enlist an experienced attorney to act as a guide through the process and go through executing your plan (making it official), you can breath easy. The great news? Once you have your estate plan in place, it never expires. But, it’s not enough just to have an estate plan—you need to keep it current so it reflects changes in your life, as well as changes in applicable laws. Just to take two examples, an outdated estate plan can more easily be challenged in probate court. or create tensions among family members, than one that reflects your current situation.
Ensuring your estate plan is up-to-date is especially important when major changes occur in your life. Here are a few of them:
- Your marital status changes through marriage or divorce.
- You might not want a former spouse to inherit any of your assets, but it could happen if your estate plan is not properly revised.
- You have kids (or more grandkids) as this could change your distribution model.
- Make sure that your children are represented by a trustworthy guardian in case something happens to you. You will also want to add any additional children as beneficiaries.
- Your financial situation significantly changes.
- Your estate plan and its distributions will need to be revised to take into consideration any changes in your income. Did you inherit money or valuable assets? Is your career is suddenly flourishing? Maybe you experienced something that’s called “a liquidity event”—that is, you’re flush with cash from winning the lottery or selling a successful business. Don’t let your good fortune evaporate by ignoring your estate plan.
- A beneficiary or legal representative dies or becomes unable to fulfill his or her duties.
- Keep the list of the beneficiaries, guardians, trustees, executors, and agents named in your estate current.
- You relocate to a different state (or country) or you acquire property in another state.
- Laws governing wills and probate vary from state to state. So, if you buy property in another state and/or set-up a secondary residence, this needs to be reflected in your estate plan. Are you a snowbird who heads to your house in southern Texas every cold Iowa winter? Make sure the Lone State property is in your estate plan. It can be a huge hassle if your will doesn’t address all of your real estate, not to mention expensive.
I advise clients to review their estate plans every year. If there are any updates or questions it’s recommended that folks meet with their lawyer and other professional advisors. Some clients like to do this around the first of the year, while others prefer picking a date that’s easy to remember, like a birthday or anniversary. Any date will work— the important thing is to do it. Don’t be late, keep your estate plan up-to-date!