The Importance of Maintaining Your Estate Plan
Congratulations! You were one of the wise individuals who took the time from your busy schedule to create an estate plan. You carefully devised a strategy for the division of your assets and debts. You appointed your family member as your Power of Attorney. You chose guardians for your children. Everything is taken care of, so you stick it in your safety deposit box and forget about it.This line of thinking is very common amongst the selective few who create an estate plan. However, if you took the time, effort, and expense to craft this plan, don’t you want to have that plan pan out exactly as expected? Failing to maintain your estate plan could cause major problems, especially for your beneficiaries. The following are a list of reasons why it is crucial to revisit your estate plan with your attorney every 3-5 years.
Posted on January 9, 2017
Major Life Changes
Your life can change very rapidly. Babies, divorce, remarriage, blended families. Your family situation could be totally flipped on its head in a matter of years. It is crucial that you update your estate plan to reflect these changes. If you get divorced, make sure to remove your ex as a beneficiary from any estate planning documents. This seems like a given, but is something people often forget. Similarly, if you remarry, make sure to add your new spouse to your estate plan. If you are in a domestic partnership or common-law marriage, make sure to add your partner to your estate planning documents to ensure that he or she will be provided for.
It also seems like a common sense decision to revisit your estate plan if you have more children or if you adopt a child, but many individuals forget to do so. Additionally, if you marry and have a blended family, you may wish to add your step-children as beneficiaries. If you fail to add them, they will not inherit anything because they are not considered your children for purposes of inheritance. It is also wise to revisit the guardians that you have put in place if you and your spouse both die. You may want to add a successor guardian if the primary guardians are unable to perform those duties or if they predecease you and your spouse.
Changes to Beneficiaries
You may wish to change your beneficiaries, whether this entails adding new beneficiaries or disinheriting other beneficiaries. If you wish to disinherit a spouse or child, you must obtain the assistance of your attorney, as specific language must be utilized. You may have become passionate about a new charity since you drafted your estate plan and you wish to add them as a beneficiary.
Do any of your beneficiaries have special needs or a serious illness? You may revise your estate plan to provide special assistance to that beneficiary, such as a special needs trust. Also, if any of your beneficiaries have predeceased you, you must add an alternate beneficiary in his or her stead.
Have you purchased or inherited significant assets? If so, you should revise your estate plan to provide for the distribution of these assets. If you have inherited significant assets, you may want to change your estate plan, such as converting a will to a trust, as increased wealth could create estate tax issues.
Changes in the Law
Estate planning and tax laws are always changing, so it is important for your attorney to review your estate plan regularly. Changes in tax law could have a substantial impact on your estate plans and on your beneficiaries when they inherit.
Change in Opinions
If you have a power of attorney or a living will, you likely detailed your wishes regarding your medical care. However, these wishes may change as you age or as your opinions change. You may no longer want to be resuscitated or you may want your organs donated. It is important to revisit your estate plan to ensure that it matches your current wishes.
Move to New State
Estate planning laws vary by state, so it is vital that you revise your estate plan if you move to a new state. It is important to obtain an attorney who is licensed to practice in your new state of residence to review your estate plan, as that attorney will be familiar with the intricacies of local estate planning laws.
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