When should you update an estate plan?

Drafting an estate plan is a good first step, but don’t make the common mistake of believing it is also the final step. Regardless of your age, there are life events that can come up and change your goals, assets, debts or other aspects of the plan. It is at these times that you need to update the plan to make sure that what it accomplishes reflects what your family really needs.

What are some of these events?

These life events can be different for everyone. For instance, a business owner may see selling their business as the most major change that can impact their plan, and they’re right to think so. However, someone who has spent a career working for a major corporation does not even consider this in the slightest, as they have no business to sell — at least, not a major enough one that it will alter their entire estate plan. You have to consider the specifics of your situation. That said, here are a few common events that may mean it’s time for an update:

  1. One of your heirs passes away.
  2. One of your heirs gets married.
  3. A new family member, such as a grandchild, is born.
  4. You get a divorce from your spouse.
  5. You get married to a new partner.
  6. You start a new business.
  7. You encounter medical issues that introduce significant debt.
  8. Your goals change and you want to do something different with your money — such as leaving it to charity instead of an heir.
  9. You come into some new assets, such as an inheritance of your own.
  10. You move to a new country or a new state.

Some of these things, such as medical expenses, come on unexpectedly. Others, such as the birth of a grandchild or a move to a new state, are planned and discussed for months. Either way, at some point in the process, it may be wise to update your existing plan. Make sure you know what legal steps are required to do so.

 

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