Estate plans are an exceptional tool for safeguarding assets, protecting your interests at the end of your life, and ensuring your loved ones receive the most benefits possible from your estate. However, these protections are useless if your estate plan is found invalid or is somehow unenforceable, which is common if it was created without a Midwest estate planning lawyer. These protections can also be impacted by life changes, preventing your wishes from being carried out.
It’s important that you continually update your estate plan throughout your life to reflect your current goals and ensure it is enforceable. Most attorneys and financial professionals recommend that estate plans be reviewed and revised every three to five years. However, this is not the only time you should look over your estate plan. There are several events that can alter one or many aspects of your estate plan and should, therefore, prompt a review of your estate plan. These include:
When you marry or remarry, you should review your estate plan. It is likely that many things will change. Many people make their spouses their primary beneficiaries and provide them with powers of attorney. You may also want to include your spouse’s family members in your estate plan and take into account any marital assets you and your spouse now have. You may also want to create a joint will or trust with your spouse.
A divorce changes the people in your life and your finances and assets. While intestate succession laws in some states automatically remove an ex-spouse as an heir, your estate plan will likely need to be changed manually. You may want to change beneficiaries, powers of attorney, and executor or trustee designations. There may also be many assets listed in your estate plan that you no longer own.
The changes after a divorce can change many things about your estate plan and render it unenforceable. It’s important to review it so that it reflects your needs and to prevent it from being void.
- An Addition to the Family
An addition to the family may include the birth or adoption of a new child or grandchild or the marriage of a family member. These changes may mean you want to alter the beneficiaries and contingent beneficiaries in your will or trust to include these family members or provide them with certain assets.
Your will can also determine a guardian for any of your minor children. If you have a new child, you may want to name a new guardian or ensure the child is listed.
- Death in the Family
If you lose a loved one, reviewing and updating your estate plan can help protect your family’s interests. You can update heirs, beneficiaries, and contingent beneficiaries so that assets do not pass to state jurisdiction or intestate law because there is no longer a valid beneficiary.
- Significant Asset Addition
You want to update your estate plan if you are buying a home or acquiring any other large asset. Large assets may include vehicles, real estate, bank accounts, or investment accounts. It’s important to include that asset in your will or trust and ensure it is protected. Your estate plan can ensure that your surviving spouse, children, or other loved ones can benefit from the asset or live in the home.
Other occasions that should prompt revision include:
- You or your family has acquired new debt or liabilities
- You have moved states
- Death of an executor or trustee
- Changes in your retirement plan, life insurance, or long-term care insurance
- A child or grandchild turns 18
- Changes in your financial goals or the goals of your spouse
- Illness or disability in the family
- Changes to state laws that impact your estate plan
Q: Why Should You Update Your Estate Plan?
A: Updating your estate plan ensures that it reflects your current wishes for the handling and distribution of your estate, as well as your care if you become incapacitated. As time passes, and when certain events occur, the terms of your will and estate plan may no longer apply.
For example, you may name beneficiaries, powers of attorney, or executors who leave the family, die, or are in some way unable to manage your affairs. Certain life changes, like divorce, can be so drastic that your estate plan is unenforceable.
It is also beneficial to have several concurrent versions of an estate plan in case a will or trust is contested in court. It will be easier for an attorney to prove contests wrong with a clear line of prior wills that you made throughout the years.
Q: What Should Cause You to Revisit Your Estate Plan?
A: There are several events that should cause you to review your estate plan, including:
- Divorce, marriage, or remarriage; yours or within your family
- The birth or adoption of a new child
- The death of a family member, heir, or executor
- A family member becomes disabled
- A child or grandchild has become an adult
- You buy a house
- You start a business
Q: What Are the 3 Main Priorities You Want to Ensure With Your Estate Plan?
A: Your goals for estate planning will be unique to your wishes, your heirs and beneficiaries, and the parameters of your estate. Common overall priorities for those creating estate plans include:
- Giving legal authority to trusted individuals to manage your care and providing directives on how you want to receive medical care if you are incapacitated;
- Avoiding probate to save your heirs and loved ones stress, time, and money; and
- Safeguarding the assets in your estate during your life and after your death so you can provide your heirs the most benefits.
Q: What Is the Most Important Component of Your Estate Plan?
A: The most common and important document in an estate plan is typically a will or trust. Both wills and trusts ensure that the assets in your estate are distributed after your death. They also place an individual, either an executor or a trustee, in charge of the assets. The individual is responsible for the care and protection of the assets and estate and distributing the assets according to your wishes.
If you use a will, your estate will still enter probate court, while a trust prevents the assets in it from entering the costly process of probate.
Protect Your Interests and Review Your Estate Plan
When you work with a qualified estate planning attorney, they can help you make informed decisions and ensure your estate plan protects your interests. Contact Stange Law Firm to learn how we can help you create or update your estate plan.