Creating an estate plan safeguards loved ones and ensures your wishes are carried out, no matter the size of the assets. Without proper planning, even modest savings or a family home can become sources of confusion and conflict among loved ones.
If you’ve already taken the first step by putting a plan in place, that’s great. However, an estate plan isn’t something you create once and then forget. Life changes constantly, and that plan needs to change with it.
Below are five optimal times to review and update your estate plan.
Big family events and milestones
Major family developments often indicate it is time to revisit the estate plan. Marriage introduces a new spouse or perhaps even a stepchild to include in the plans. Conversely, divorce requires immediate attention to remove an ex-spouse from the documents.
Similarly, the birth of a child or grandchild may significantly alter the protections and provisions an estate plan should contain. Update the will to include them and revisit guardianship designations for any minor dependents.
Without these revisions, a court may ultimately determine who assumes responsibility for your children if something goes wrong.
Moving across state lines
Moving out of Michigan or into it can affect how the documents hold up legally, as each state has distinct laws governing estates, trusts and property transfers.
What worked perfectly in one state might not hold up in a new jurisdiction. It is important to ensure that the documents comply with the laws and procedural requirements of your new state.
Changes in business or investments
An estate plan should always reflect what current assets, so consider conducting a review after you:
- Purchase or sell real estate property
- Start or close a business
- Acquire significant assets like investments or valuable collections
- Inherit money or property from someone else
- Pay off or take on substantial debt
These financial shifts can dramatically influence how you’d distribute assets and whom to appoint to manage them.
New tax laws implemented
Federal and state tax laws can shift and change what your heirs receive. When legislators change estate tax exemptions, inheritance taxes or gift tax rules, even the most carefully crafted plan might need adjustments.
Tax law changes may directly affect how your estate transfers and how much your loved ones get to keep.
Death of a beneficiary, executor or trustee
The death of a beneficiary demands estate plan updates to reflect the current reality. This rule extends not only to designated beneficiaries but also to the trustee or executor named in the plan. Outdated names create real complications when it’s time to carry out your wishes.
Keep estate plans current for peace of mind
Having an estate plan offers a solid foundation, but maintaining its effectiveness requires ongoing attention. Review the documents every three to five years, even when nothing major happens.
Whenever circumstances or wishes change significantly, reach out to your estate planning attorney. Your family deserves a plan that keeps up and reflects your current life and goals.