Creating an estate plan is a crucial thing to check off your to-do list. However, that does not mean your planning is complete for all time. Updating your estate plan periodically is crucial to ensuring your documents align with your wishes as circumstances change.
If things have changed since you initially created your estate plan, now could be an excellent time to review and update.
Updating your plan after these events
Financial, medical and personal changes in your life can mean that an existing plan no longer reflects your wishes. Some of the events that may prompt a change to your estate plan, include:
- Having a child
- Losing a loved one
- Dramatic loss or increase in financial resources
- A serious accident or change in medical condition
- Buying or selling property
- Placement of a loved one in a long-term care facility
As important as it is to update your estate plan after these specific events and changes, you need not wait for one of them to occur before revisiting estate planning strategies.
The passage of time
A lot can change over time, even if there is no single, dramatic event. People change; relationships change; perspectives change.
Thus, the passage of time could suffice as a reason to review your plan. It also allows you to make administrative or personal adjustments, such as:
- Changing beneficiaries
- Appointing new executors or trustees
- Establishing trusts for minors
- Updating addresses and contact information
- Removing or adding restrictions
- Adding passwords, login information and other information for digital assets
- Changes related to new tax laws or other legal changes
Why updating is crucial
Many of the most common conflicts that arise when administering an estate are related to the failure to update or take into consideration changes that have occurred after the estate plan was originally established. These issues can trigger disputes and legal battles that stretch on for months, costing parties time, money and generating ill-will.
However, when you regularly review and update your plan, you can limit these disputes and the disruption that comes with them.