Finalizing your estate plan brings a sense of satisfaction and accomplishment. It took a lot of time and careful thought, but now you know that your assets will be handled according to your instructions, and your loved ones will have financial security, even after you are gone.
But that doesn’t mean you can put it away and never look at it again. If your estate plan doesn’t reflect your current circumstances, it’s almost as bad as having no estate plan at all.
Life and other stuff
Reflect on your life so far, and then envision it 20, 30 and even 40 years into the future. It’s full of changes. Your life at 20 looks a lot different than life at 80. Just like your life changes, your estate plan should too. Here are some key moments that should remind you to get out your estate plan to review and update:
- You got married. You and your spouse are starting a life together, and you want to ensure that they will be provided for in the event of your passing. Therefore, you make your spouse the beneficiary of your life insurance policy and bank accounts. You also trust them to make healthcare and financial decisions for you, so you name them as your healthcare agent and durable power of attorney (POA)
- You welcomed a child into your life. Whether by adoption or birth, the addition of a new family member is a reason to celebrate. It’s also a reason to update your estate plan. You need to appoint a guardian in case the unexpected happens to you and your spouse. You may also want to create a trust to provide for their financial needs.
- You and your spouse divorced. It happens. Couples grow apart and decide that it’s time to end their marriage. Hopefully, it’s not contentious, and the two of you have a great co-parenting relationship. But no matter how well you and your ex-spouse get along, you probably want to remove them as a beneficiary, healthcare proxy and POA.
- You re-marry. After a divorce, 75% of Americans marry again, and many of them have at least one child from their previous marriage. It’s essential to update your estate plan to ensure your children receive their inheritance, while also making provisions for your new spouse.
Other significant life events, such as starting or selling a business, retirement or receiving a substantial windfall, also necessitate reviewing and updating your estate plan. Speak with a legal representative about regular reviews of your estate plan to ensure it reflects your current life circumstances.
