Far too often, individuals will take the time to develop a comprehensive estate plan that includes numerous contingencies and financial documents, and assume the plan will never need to be revised in the future. There are numerous significant life events that necessitate an update or complete revision, based on what has changed.
There might be countless reasons to ultimately revise an estate plan, but here are three of the most common life events:
- Changing marital status: Whether it is due to marriage or divorce, this life event will likely lead to the most dramatic changes in estate planning and insurance documents. More than likely, you will be forced to revise nearly every element of your estate plan from the will to the trust to the powers of attorney.
- A new child in the family: This is likely the most common reason individuals will need to revise various elements of their estate plan. This could be the birth of a child, a new child of marriage or an adopted child. You will want to establish a trust for any minor children and note properties to be listed as inheritance in the will.
- Death of an heir: Many people make the mistake of only listing beneficiaries rather than listing primary and secondary. If a named heir dies, it is important to replace this individual with a new person in your estate planning documents.
Additionally, any time you experience a change in a significant relationship, it might be wise to update your will, trust, powers of attorney or other related documents. This change could range from an heir who has fallen out of favor to an executor who is now unsure he will be able to perform the tasks asked of him. When revisions become necessary, it is wise to make the changes as soon as possible so there is no confusion regarding your end of life decisions.
While self-help websites have gained popularity in the past, there is no substitute for working with an experienced legal professional who can provide the guidance and insight you need. Do not hesitate to contact a lawyer when you are drafting your estate plan or when the plan needs to be revised.