Many people are smart about getting their estate plan done while they are young and healthy. They might choose to get it done early in life and then think they are done. Although the first step of creating the plan is complete, this doesn't mean that you are completely finished with the process. Instead you should be updating your plan often. Here are a couple reasons to update your estate plan.
1. A Change In Marital Status
Most estate plans will have your spouse as the main beneficiary. Your spouse is probably given power to make legal and medical decisions for you, and all of your property is most likely passing to them upon your death. This is why it is so important that your estate plan is current with your marriage.
If you have been recently divorced, or if you are in the process of divorcing, you need to change your estate plan. In the chaos of a divorce, many couples forget to make the necessary changes. Divorces can take a great deal of time, and if something were to happen to you before the divorce was final, you might not want your ex-spouse to be making all of your decisions for you.
In addition, if you have been single and are getting married, it is important that you name your new spouse in your estate planning documents. It is not automatic that they will be given your estate.
2. Any Change In Income Or Wealth
Another reason to revise your estate plan is if you have changes in wealth. Within your estate plan you will probably have multiple trusts set up. These trusts will allocate the money accordingly. You may want some of your money to go to family, some to charities, and so forth. If you don't allocate the money in your estate plan, it will all just be divided equally among family members.
3. Death, Birth or New Step-Children
If you have had a new child or the death of a child you should revise your plan to reflect that. In addition, if you have been remarried and want to give money to your step children you will have to explicitly say that in your estate plan. Most states do not honor stepchildren in estate plans, which is why it is so important that you give instructions on how you want the step children to get parts of the estate. Otherwise they will be completely left out.
If you are ever in doubt about updating your estate plan, talk to an attorney like Acton & Snyder, LLP. They will let you know when the right time is.