Creating a comprehensive estate plan is only the beginning of the estate planning process. Every so often, a life event will require you to review and revise your estate plan to keep it current. Here are the top four events that will likely trigger major updates to your plan.
When Should I Revisit My Estate Plan?
To remain as effective as you need it to be, you should revisit your estate plan often. Set a schedule with your estate planning lawyer to review your plan and discuss any necessary updates. Also be sure to reach out to your lawyer if you encounter any of these life changes:
1. A Pending Divorce
Most divorce attorneys will tell you to update your estate planning documents after your divorce. You’ll need to remove your ex-spouse from your will, any trusts, beneficiary designations, powers of attorney and more. But waiting to make these changes until after your divorce can prove to be too late.
Take for example the recent healthcare debacle involving basketball star Lamar Odom. His divorce to Khloé Kardashian was still pending in LA courts. Since Mr. Odom’s estate planning documents had not been updated while the divorce was pending, Ms. Kardashian remained legally responsible for Mr. Odom’s care under his healthcare power of attorney. Both parties knew the marriage was over, but neither had made any efforts to update important legal documents.
You can avoid the legal quagmire that a pending divorce can present by working closely with your attorney to get all of your affairs in order—family, estate and otherwise.
2. A Growing Family
The birth of a new child, or the adoption of a child into your family, is one of the most joyous occasions of your life. It should also be an immediate indicator that now is the time to revisit your estate plan. You’ll want to add that child to your overarching plan as quickly as possible.
You will also want to discuss other estate planning options. For instance, you may want to set aside funds into a college savings plan or trust account. You will also need to identify and document the party or parties you want to have care for your child in the event of your untimely death.
3. An Impending Retirement
You are able to set aside funds for your retirement throughout your working years. But what happens you’re your retirement date gets closer? What will you do to ensure you have the financial support you require throughout your sunset years? A close review and smart updates to your plan now will help you make the most of your retirement.
4. A Loved One’s Death
You will want to revise your estate plan any time one of your beneficiaries passes away. Losing a loved one is hard enough. Having to consider what that loved one’s death may mean for your estate plan may seem like the last thing you want to address. Unfortunately, time is never your friend when it comes to this. Act quickly to take care of business and allow yourself the room you need to grieve.
Other Big Changes on Their Way? Call Your Attorney.
Do you want to revise your beneficiary list? Have you recently acquired a large asset? Are you considering making charitable giving a larger part of your legacy? Whatever changes you are considering, be sure to reach out to your estate planning lawyer to discuss your thoughts and gain the guidance you require.