Once you create an estate plan, you will likely appreciate the peace of mind that comes from knowing you have provided clear instructions for the people that you love if something happens to you. Earlier estate planning is usually wise because no one knows what the future holds.
However, estate planning when you first get married or buy a house will likely mean that you need to update your estate plan as your life changes. You can revisit and change your estate plan at any point, but the four reasons below are common motivations to make some estate plan updates.
1. You develop a medical condition
A diagnosis with cancer, Lou Gehrig’s Disease or many other conditions may change your perspective on many parts of your life. Knowing that your condition will continue to deteriorate may change what medical preferences you have, while the suddenly looming prospect of your own mortality may shift what you want to do for your legacy. Those facing medical hardship or terminal illness often choose to update their estate plans.
2. You get married or your marriage ends
Spouses often play a key role in an estate plan. They may serve as co-trustee for the primary beneficiary of your last will. When you get married, you will want to update your estate plan to adequately protect and integrate your spouse.
If you divorced, the opposite is true. You will want to remove your ex as a beneficiary and take away any authority you delegated to them previously. If you have children, you may also want to revise how you structure your legacy so that your ex won’t ever gain control over it.
3. You have another child, adopt or otherwise expand your family
Some people often carefully distribute property among their children or grandchildren. As each generation of your family grows, you may need to make changes to the way that you plan your legacy.
Adding new beneficiaries is as important as removing beneficiaries who died or who exit your family because of divorce or other circumstances. Keeping beneficiary designations up-to-date will make your estate plan more easily enforceable in probate court.
4. You gain or get rid of major assets
Whether you buy a cabin, inherit a business or sell your family home to move into a retirement community, changes to your personal holdings can affect your estate plan. Everything from creditor claims to tax liability can shift when you add or remove significant assets from your personal property.
It is generally a good idea to review your estate plan every few years and whenever your family or you personally go through a major change. Keeping your estate plan up-to-date gives you the greatest degree of protection and makes it harder for others to challenge your wishes after you die.