The changes that life throws at you can be difficult, if not impossible, to predict. You may have various events that catch you off guard with some being good or beneficial and others being troublesome. Whatever the case, if you have already created your estate plan, you would be wise to review those plans after a major life event.
Because estate plans are completely customizable and unique to those who create them, any change could result in your needing to revisit your plans. After all, if you indicated that a beloved friend should receive an important asset but later have a falling out with that friend, you may need to update your plan so that person does not still receive that item after your passing, for example.
What are other causes to update your plan?
The reasons for revisiting and updating your estate plan can range from something as simple as changing your mind on a particular detail to needing a new executor because your appointed person passed before you. If you do not make the appropriate changes, your loved ones may have a difficult time sorting through the challenges presented by outdated information. Some instances when updating a plan could be wise for most individuals include the following:
- Bringing a new child or grandchild into the family whether through birth or adoption
- Getting married or divorced
- Experiencing a death in the family, especially if the individual was named as a beneficiary of your estate or on a payable-on-death account
- Making a significant purchase, such as a home or additional real estate
- Changing careers or experiencing a significant change in income
- Receiving a significant inheritance of your own
- Facing changes to federal or state laws that affect your estate or estate plan, particularly regarding taxes
- Becoming seriously ill or disabled
- Taking out a significant loan or accruing considerable debt
Of course, this list is not exhaustive of every reason you may need to update your estate plan. In fact, it is often wise to review your plan every few years, even without experiencing a major life change, to ensure that you have not changed your mind about the information you have already provided. Though it may seem inconsequential, outdated information in an estate plan could cause major problems for your surviving loved ones, including possibly rendering your plan invalid. As a result, keeping those details current is wise.