Planning ahead to ensure that your wishes are known and will be honored should something happen to you is always fulfilling. This is where an estate plan comes in.
However, an estate plan is not a document that you “create and forget.” Certain life events may require you to review and change your estate plan so it can reflect your current wishes and intent. Failing to update your estate plan in light of these events can have a negative impact on your life, loved ones and future.
Here are two important life events that should trigger a review and an update of your estate plan:
A change in marital status
If you recently tied the knot, it is important that you update your estate plan to include your new spouse and change the beneficiary designations on your insurance policies and other payable-on-death accounts.. Even if you are not married but have a long-term partner, you may want to include them in your estate plans.
If your affections have changed and you’ve gotten divorced, you may want to update your estate plans to ensure that your ex-spouse’s share or interests in your estate are revoked. This is especially important if you gave them your financial and medical powers of attorney or made them the beneficiary of your life insurance policy.
You have a new child
The birth or adoption of a child is another major life event that should prompt an update of your estate plans.
If you have recently had a child, it is important that you identify a guardian who will manage the trust on their behalf before they become adults. Ideally, you should consider holding your child’s inheritance in a trust until they become an adult. If this is something that interests you, then you need to include a trust in your updated estate plan.
An estate plan is a living document that should be reviewed and updated regularly. While life events happen, you will certainly need to update your estate plan to ensure that it is in tandem with your goals.