Making your estate plan was a terrific first step, but don’t assume that’s the only step you need to take. Those documents may not work forever. Depending on how life moves forward, you may need to update them. Below are six reasons to look over your estate plan and consider changes.
1. Children become adults
If you made your estate plan when your kids were minors, you probably set up trusts to pass on money when they came of age and you picked a guardian to help care for them. When they become adults, it may be time to update things to remove the role of the guardian and to transfer assets more directly.
2. You get married
Maybe you did your estate planning on your own or after ending an early marriage. If you get married again, it’s time to look over that plan one more time. That’s especially true if you already have children from a previous marriage or if your new spouse does. Blended families make things more complicated than they would be otherwise.
3. You get divorced
In a similar vein, you always want to check over your plan if you get divorced. Take your ex out of the plan and figure out new ways to divide your assets. Make sure you check things like your life insurance policy or your retirement account, which may have your ex listed as a beneficiary.
4. You have a new child
Whether the child is born naturally or adopted, any time you add a new heir into your life, your plan needs to reflect that. Consider how you can best set this new child up to succeed in life, even when he or she is still too young to understand your role. Your legacy can last for generations.
5. You want to cut someone out
Maybe you want to disinherit a child who got into legal trouble or cut ties with the family. Maybe you want to get rid of a guardian or a trustee. People change. Life changes. Your plan has to change to match it.
6. You gain a substantial asset
You don’t have to update your will for every minor purchase, but you should for major purchases or sales. Maybe you used money you planned to leave to the kids to buy a new business. Now you need to leave the company to them, setting up a succession plan that is far more complicated — and far more valuable — than just leaving them money directly.
Updating your plan
When life comes at you quickly, do not forget to slow down and consider the legal ramifications. Make sure you know what steps to take to update your estate plan.