Three Life Events that Cause Your Estate Plan to Be Outdated

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When Life Changes – Review Your Estate Plan

Life changes can happen at any time. Being aware of how specific life events can impact your legacy as defined by your estate plan is crucial. An estate plan is not a “Set it and Forget it” type of document. While signing a will or trust feels like you are all sorted for the future, the reality is that you need to review your documents every three to five years to ensure its accuracy.

As years pass, families change and lie events occur. For this reason, the documents you use to govern your legacy should not remain frozen. When people leave their plans in place after a major milestone, they leave behind the threat of legal disputes and increased tax burdens for their loved ones.

The Three Life Events That Should Trigger a Review

• Birth of a child or grandchild: Births can change the way your legacy is distributed. A common mistake is assuming that a natural heir is automatically covered under the current language. Unless your plan is updated to specifically reflect a new beneficiary, that child may not receive the protection they deserve. This is particularly critical when naming guardians and keeping them current.
• Divorce: Ending a marriage can change an estate plan in a variety of ways. While the court decree divides marital property, it does not automatically update every individual account or legal instrument. After a divorce, do a comprehensive review of your assets. Review beneficiaries on all your accounts, if a beneficiary form remains unchanged an ex-spouse could have a valid claim regardless of what your will states. This extends to all your decisions making documents such as Power of Attorney and healthcare directives.
• Remarriage: Consider a precise revision of your estate plan and ancillary documents if you get remarried. This avoids a new spouse being left with no legal claim to your estate as well as preventing any chance of disinheriting children from a prior marriage. In cases of blended families, uneven distributions become common. An immediate review and update of your documents allows you to establish trust structures that can provide for a surviving spouse as well as your biological children.

When you are ready to review and amend your estate plan, contact us to start the process and ensure that it is legally recorded.