2 instances when it’s crucial to update your estate plan

On Behalf of | Dec 11, 2023 | Estate Planning |

As life evolves, so should your estate plan. Otherwise, the documents that you’ve put in place may not accurately reflect your wishes upon your incapacity or death.

Major life events such as marriage, divorce or a new addition to your family can drastically change your estate planning needs. Updating your plan to reflect these changes helps to ensure that your assets align with your current priorities and responsibilities.

Marriage and divorce

Marriage and divorce are life events that can significantly impact your estate plan, necessitating careful consideration and timely updates. With marriage comes shared financial responsibilities. A well-crafted estate plan addresses the financial well-being of your spouse, offering provisions for their support and security. This includes updating beneficiaries, trusts and life insurance policies.

Divorce entails the division of assets, requiring a reassessment of your estate plan to reflect your changed financial circumstances. This includes updating beneficiary designations, wills and trusts. Removing your ex-spouse from your estate planning documents is essential to prevent unintended bequests and complications. Failing to do so may result in assets going to an undesired recipient.

Birth or adoption of a new child

With the birth of a child, your family structure changes, and so should your estate plan. Begin by revisiting beneficiary designations on life insurance policies, retirement accounts and other relevant financial instruments. Updating these designations can ensure that your assets flow seamlessly to intended beneficiaries.

A new addition to the family also means considering who would care for your child if the unexpected occurs. Naming a guardian in your will is a crucial step. This decision demands careful consideration, encompassing factors like values, parenting style and the ability to provide a nurturing environment.

Remember, as your child grows, so do their educational needs. An updated estate plan should address funding for their education. Consider establishing trusts or education-specific accounts to provide financial support for academic endeavors.

Maintaining an updated estate plan is a proactive approach to safeguarding your family’s future. These two life events should incentivize you to revisit your estate plan to help ensure it remains a precise reflection of your wishes, providing peace of mind for you and your loved ones.