Change is a constant in life that cannot be stopped. As an individual ages, he or she is likely to experience and encounter many joys, sorrows and challenges that ultimately make for a full life. Changes in income, the birth of a child and marriage or divorce are all monumental events that can greatly impact an individual's responsibilities and financial status.
Taking the fact that change is a constant in everyone's life into consideration, it makes sense that changes must also be made to the makeup and management of one's estate plan. Many individuals who take the first important step to set up an estate plan wrongly believe things are complete once they've created a will or set up a trust. In reality, however, these documents should be revisited and, if necessary, revised on a routine basis.
While it's wise to review and make appropriate changes to an estate plan every few years, there are certain life events that necessitate prompt action. For example, an individual who either marries or divorces will want to make the appropriate changes to estate planning documents, including updating beneficiary designations.
Additionally, the birth of a child is a momentous occasion that requires parents to consider guardianship matters. While no one wants to contemplate the unthinkable, the reality is that people die in accidents and parents would be wise to make decisions related to who would care for a minor-aged child in the event of such a tragedy.
Another life event that may necessitate a change in an estate plan relates to a sudden gain or loss of income. Uncertain economic times require individuals to be especially prudent when it comes to financial matters and protecting wealth. Taking the time to plan now could potentially save loved ones time, money and hassle down the road.
Many of these and other types of estate planning matters are complex in nature and can be difficult to fully grasp. For these reasons, it's advisable to seek the advice and guidance of a legal professional who can answer questions and help tailor an estate plan to meet an individual's long-term personal and financial goals.
Source: ABC 23, "When Should An Estate Plan Be Reviewed?," Keith Mmorris, Nov. 7, 2013