When Life Changes, Your Estate Plan Should Too: A Guide On When To Update Your Plan

When Life Changes, Your Estate Plan Should Too: A Guide On When To Update Your Plan

Life can be unpredictable, and many unexpected events can occur that may prompt a review of your estate plan. Your estate plan outlines how your assets will be managed and distributed after your death and might include a will, trust, power of attorney, and/or healthcare directives. However, it’s not a set-it-and-forget-it document – it is an ongoing process that requires regular updates and revisions to ensure that it remains relevant to your current circumstances.

Here are seven life-changing events that may prompt you to revisit your estate plan:

  1. Marriage or Divorce: A change in your marital status can have a significant impact on your estate plan. If you get married, you may want to update your will to include your new spouse, while a divorce may require changes to beneficiary designations and other documents.
  2. Birth or Adoption of a Child: The arrival of a new child is a joyous occasion, but it also requires careful consideration of your estate plan. You may want to update your will to indicate the preferred guardian for your child and ensure that your child’s financial future is secure.
  3. Death of a Beneficiary or Executor: If a beneficiary or executor named in your estate plan passes away, it’s important to revise your estate plan and make any necessary changes. For example, you may want to designate a new beneficiary or appoint a new executor to manage your estate.
  4. Changes in Financial Circumstances: A significant change in your financial situation, such as receiving a large inheritance or experiencing a sudden loss of income, can impact your estate plan. It may also put you in a different income or estate tax position, which can be eased through appropriate planning. You may need to revise your will, trust, or other documents to reflect changes in your assets or financial goals.
  5. Relocation to a New State: If you move to a new state, you may need to update your estate plan to ensure that it complies with the laws of your new state. Estate planning laws can vary widely from state to state, so it’s important to ensure that your plan remains valid.
  6. Health Concerns: A diagnosis of a serious illness or injury can prompt a need to revisit your estate plan to ensure that your medical wishes are clearly stated and that your belongings are allocated as you desire.
  7. Tax Laws: Changes in tax laws can impact your estate plan, particularly if you have a high net worth. You may need to revise your plan to take advantage of new tax saving strategies or minimize your tax liability.

Life is full of surprises and changes that can impact your estate plan. That’s why it’s important to stay vigilant and revisit your plan periodically, particularly when life-changing events occur. By updating your estate plan in a timely manner, you can ensure that your assets are distributed according to your wishes and your loved ones are taken care of. Don’t wait until it’s too late to review your estate plan – start today and enjoy peace of mind knowing that you have a plan that reflects your goals and values.

Have Additional Questions?

If you would like to learn more about whether your estate plan might require revision, our team is here to help. Please contact us for more information.

Rebecca McNabb, J.D., LL.M., serves as Vice President and Trust Officer for Magnolia Trust Company. In this role, Rebecca brings her legal background and trust administration experience to support the areas of complex estate planning and trust administration issues.

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