Estate planning is one of the essential tasks every individual, regardless of age or net worth, should undertake. It involves creating a plan that outlines how your assets will be distributed after you pass away. Estate planning is essential because it helps to ensure that your loved ones are taken care of when you’re no longer around. However, creating an estate plan is not a one-time event. It’s crucial to update it regularly to reflect your changing circumstances and ensure it remains relevant and effective. In this article, we explore the importance of updating your estate plan regularly.
1. Changes in your personal or family circumstances
Life is full of surprises, and significant changes may happen without warning. Marriages and the arrival of children, for instance, can significantly impact your estate plan. Births or deaths within a family may also result in a need for changes to your estate plan. If you undergo significant life changes, you should review your estate plan regularly and adjust it accordingly.
2. Changes in your assets
Over time, you might acquire new assets or dispose of ones you’ve had for a long time. These changes can result in an estate plan that no longer reflects the current value of your estate. Consequently, it’s crucial to update your estate plan regularly to reflect any acquisitions, sales, or transfers of assets.
3. Changes in the law
Laws regarding estate planning and taxes are subject to change from time to time. Laws affecting estate planning may vary from state to state, and federal laws evolve with time too. By updating your estate plan regularly, you ensure that it reflects any changes in the law and takes full advantage of any opportunities available.
4. Changes in your chosen beneficiaries
Your chosen beneficiaries for your assets may change over time. For example, a beneficiary may have passed away, leaving the distribution of your assets unclear. Or you may want to add new beneficiaries or change the amounts you’re leaving them. Regularly updating your estate plan ensures that your assets go to the right beneficiaries, as you intended.
5. Your health condition changes
Your health is unpredictable, and your estate plan should reflect this. In the event of incapacitation, a power of attorney may need to be updated to reflect a change in the person authorized to make decisions on your behalf. It’s also essential to plan for disability or incapacity, and you can include a means for how your health care should be managed in your estate plan.
In conclusion, creating an estate plan is only the first step in ensuring that your loved ones are taken care of after you pass away. Failure to revise an outdated estate plan can leave you and your loved ones open to significant legal and financial risks. By updating your estate plan regularly, you ensure that it remains current, reflects changes in law, and most importantly, it upholds your wishes for your estate.
