Estate planning is the process of creating a strategy for the care and management of your property if you become incapacitated or upon your death. A common motivation of estate planning is to simplify the estate administration process and protect your loved ones. However, your plan must also name someone who will make medical and financial decisions for you if you cannot make decisions for yourself. You also need to consider how to best leave your property and assets while considering your family’s circumstances and needs.
Estate plans shouldn’t be created and then forgotten about. As your needs and circumstances change, so should your estate plan. Here are some life events that require an estate plan update:
- Marriage: While it may not be the first thing that comes to mind for an engaged or newly-wed couple, marriage is an essential time to update or create an estate plan. You have likely already updated emergency contacts and added your new spouse to existing health and insurance policies. Here’s another important reason to update your estate plan upon marriage: in the event of your death, your assets may not automatically go to your spouse, especially if you have children of a prior marriage, a prenuptial agreement, or if your assets are jointly owned with someone else (like a sibling, parent, or other family member). A comprehensive estate review can ensure you and your new spouse can evaluate your planning goals and update the estate plan as needed.
- Birth or adoption of children or grandchildren: When a new baby arrives it seems like everything changes – and so should your estate plan. For example, your trust may not “automatically” include your new child, depending on how it is written. So, it is always a good idea to check and add the new child as a beneficiary. As the children (or grandchildren) grow in age, your estate plan should adjust to ensure assets are distributed in a way that you deem proper. For example, what seemed like a good idea when your child or grandchild was a four-year-old may no longer look like a good idea once their personality has developed and you know them as a 25-year-old college graduate.
- Divorce: When you’re divorced, you should update beneficiary designations for all insurance policies and retirement accounts, any powers of attorney, and any existing health care directives, and HIPAA authorizations. It is also a good time to update your trust to make sure it does what you want.
- The death of a loved one: Sometimes the people who are named in your estate plan pass away. If your chosen successor trustee, executor, guardian, health care agent or designated power of attorney dies, new ones should be named right away. And if someone named as a beneficiary in your estate plan dies before you, you should review the plan to make sure that the contingent beneficiary arrangement still matches your wishes.
- Significant change in assets: Whether it is a sudden salary increase, an inheritance, or the purchase of a large asset, these scenarios should prompt a review of an existing estate plan. The bigger your estate, the more likely there will be issues over the disposition of the assets after you are gone. For this reason, it is best to see what changes, if any, are needed after a significant increase (or decrease) in your assets.
- A move to a new state: It’s always a good idea to learn what you need to do to completely protect yourself and your family when you move to a new state. For most people, it is a good idea to obtain a new set of estate planning documents that clearly meet your new state’s legal requirements. We are here to help you get fully settled in and build a plan to protect you and your family.
Have you experienced one of these life events that require an estate plan update? Contact us at 419-872-7670 or request an appointment through our website to set up an appointment to update your estate plan.