You’ve made the smart decision to create an estate plan early in life. If anything should happen to you, your family won’t have to make tough decisions or go through a difficult court process. Your plan can protect them from losing out on your income while transferring your assets smoothly.
However, the circumstances of your life are not set in stone. As things change, you will need to update your plan. Here are a few reasons you may need to revisit your estate plan:
- Adding family members – As you have children, you will need to update your will or trust documents. Naming a guardian makes sure your children have someone to go to if you aren’t around. And if you have a life insurance policy, you may want to add your newborn as a beneficiary and possibly increase your limit.
- Losing a family member – If a beneficiary of your inheritance passes away, you may need to update your will or trust documents.
- Marriage – When you and your spouse become one unit, you may want your plans to work together. You can both create wills or trusts that leave your assets to each other. And a power of attorney or health care proxy makes sure your spouse can make decisions if you are medically incapacitated.
- Divorce – When you end a marriage, you may need to remove your former spouse from all your estate planning documents. A divorce decree may also require you to purchase a life insurance policy with your ex as a beneficiary.
- An increase in finances – If you receive an inheritance or large sum of money, your current plan may not adequately cover it. You may need more sophisticated ways to leave your assets behind without paying excessive taxes or fees.
In addition to major life changes, you should regularly check your plan every few years. Revisiting it can help you ensure that it still offers you and your loved ones the greatest benefits.