Estate planning is not a one-time responsibility. It is a process that requires regular consideration from an individual. People derive the most protection from establishing estate plans early in life and then routinely modifying the documents to better meet current needs.
There are many scenarios in which estate planning updates may be necessary, and checking documents for outdated terms every few years is generally the best practice. That being said, there are specific life circumstances that warrant an immediate review of existing estate planning paperwork.
What experiences are warning signs that new documents or significant changes are likely necessary?
1. A marriage or divorce
Spouses feature heavily in estate plans in most cases. Married couples may draft documents together or name one another as beneficiaries. People who marry or divorce generally need to change their documents to protect new spouses or remove references to their former spouses.
2. The birth of a beneficiary
Adding children and grandchildren to a family can be a source of joy. The birth of a child is also a reason to make changes to an estate plan. People may need to modify their documents to include their new family members and redistribute the assets previously allocated to their children and grandchildren.
3. Asset liquidation or acquisition
Minor purchases, such as furniture, generally do not require estate plan modifications. However, real property purchases or sales may drastically alter the terms of an estate plan. So could the liquidation of investment holdings or the sale of a small business.
Discussing changing personal circumstances with an estate planning attorney can help people ensure that their documents are up-to-date and accurate. Regular revisions help ensure that people protect themselves and leave a legacy that upholds their values.