Like a lot of folks, maybe you thought that creating a Will or Trust is something you can do once and then your family and assets are protected forever after. But, it’s not that simple, and thinking of it that way could leave your family with a big mess when something happens to you.
In reality, life events can drastically affect your estate plan and even cause your plan not to work in the way you intended. To make sure your plan remains up to date throughout your life, we recommend reviewing your plan at a minimum of every three years. Because we are so passionate about this, we offer to review our clients’ plans every three years for free; and we offer a Client Care Program that allows and encourages our clients to review their plans annually.
And, if any of these 10 life events happen before your three-year plan review, you’ll want to have your plan professionally reviewed right away. Let’s take a look at these 10 life events and how they can affect your estate plan and what changes may be required.
01 | Your Assets or Liabilities Changed
Changes in your assets, such as acquiring a new home or other assets, selling property, or incurring debt should prompt a review of your estate plan. You may need to update asset distribution, beneficiary designations, and financial provisions to reflect these changes accurately and ensure that the people you love receive what you intend when you die.
02 | You Bought, Sold, or Started a Business
Owning a business adds another layer of complexity to your estate plan. If you’ve recently bought or sold a business, it’s essential to update your plan to reflect what you want to happen to your business when you die, ensure a smooth transfer of ownership (if desired), and create a plan to protect your business assets for yourself and your loved one’s future.
03 | You Gave Birth or Adopted a Child
Welcoming a new child into your family is an incredibly joyful moment. As a parent, it’s essential to update your estate plan to include provisions for your child’s well-being and financial future. This includes naming Guardians for minor children, creating a Kids Protection Plan®, and ensuring their financial security through Trusts or other means.
04 | Your Minor Child Reached the Age of Majority (or Will Soon)
As your children grow up and reach the age of majority, it’s time to review how they will receive their inheritance, make sure someone can legally make healthcare decisions for them, and manage their money in the event they become incapacitated. Depending on their level of maturity, you may want to consider if they are ready to handle assets on their own and if so, what amount.
05 | A Loved One Dies
The loss of a family member is emotionally devastating, and it can significantly affect your estate plan. If a deceased loved one was a recipient of assets under your Will, Trust, or financial accounts, it’s crucial to update these documents to make sure your assets will be distributed to the right people.
06 | You Became Seriously Ill or Injured
A sudden illness or injury can leave you incapacitated and unable to manage your affairs. Therefore, it’s essential to review your estate plan to ensure it includes Powers of Attorney for healthcare and finances. These documents let you name someone you trust to pay your bills and manage your assets, as well as make medical decisions for you if you can’t speak for yourself.
07 | You Moved Here From Another State
Each state has its own laws and regulations regarding estate planning, so if you moved here from another state after completing your estate plan, it’s crucial to have your plan reviewed by a local attorney. If your existing plan doesn’t meet our state’s requirements for how an estate plan is signed or witnessed, or contains terms or processes that differ from the processes of our state, this can cause delays when your plan needs to be used and may even require a court to review its validity.
08 | You Got Married
Marriage brings about not only joy and celebration but also important legal updates that are easy to put off. When you tie the knot, your estate plan needs to reflect your new marital status. Some states automatically make your spouse a co-owner of some of your property, but that doesn’t ensure an easy transfer of that property to your spouse when you die. Other states do not make any automatic updates in ownership.
09 | You Got a Divorce
The end of a marriage is a significant life event that requires immediate attention to your estate plan. After a divorce, you’ll likely need to revoke and redo your entire estate plan. This includes creating a new Will and Trust (if applicable), updating beneficiary designations on life insurance and retirement accounts, and revising asset distribution to reflect your new circumstances and relationships.
10 | The Law Changed
Tax laws are subject to change, and revisions to estate tax exemptions can have a substantial impact on your estate plan. If there are significant changes in federal or state estate tax laws, it’s crucial to review your plan with an estate planning attorney to minimize tax burdens and protect your wealth for your loved ones.
By Your Side Through All of Life’s Changes
Your estate plan serves as the bedrock protecting your family and finances, not just for today but also for the future. However, estate planning isn’t a one-time task – it should adapt and evolve alongside the changes in your life.
At Davidek Law Firm, our mission is to be by your side through all of life’s changes, ensuring your estate plan remains up-to-date and effective no matter what life brings your way. That’s why we offer our clients a complimentary review of their estate plan every three years, and we encourage them to reach out at any time before then with questions about life changes or events that might affect their plan. We also encourage our clients to join our Client Care Program, which includes an annual review of their estate plans (not just every three years), among many other benefits to help keep your plan current and your loved ones protected.
This article is a service of Davidek Law Firm, PLLC. We don’t just draft documents; we ensure that families and business owners make informed and empowered decisions about life and death, for themselves and the people they love.