Your estate plan is how you can let your loved ones know how to handle decisions if you become incapacitated or your assets if you die. There’s no way for you to know what the future holds, so there’s a chance that circumstances may evolve in a way that requires you to update your estate plan over time.
Because your estate plan should always reflect your current wishes, it’s critical that you remember to review it if any changes occur that render provisions in your current estate planning language inaccurate. If any of the following occur in your life, or if it’s been more than a couple of years since you last reviewed it, you should take a look at your estate plan.
Major life changes
One of the main reasons you may need to review and update your estate plan is that you have experienced a change in your family composition. This could be the birth of a child or the death of someone named in the plan. It may be the addition of a spouse or a divorce. When life evolves, your preferences may evolve too.
Financial changes
You should also review your estate plan if you experience significant changes in financial matters. This may include selling or purchasing assets, including businesses. All assets that are yours should be addressed in the estate plan (or elsewhere, such as beneficiary designations tied to certain accounts), and you must remove any that you don’t own any longer. Any large changes in your wealth may also necessitate an estate plan review because some changes may impact estate tax obligations.
Changes in applicable laws
Changes in estate planning laws or regulations can also necessitate a review of your plan. It can be challenging to keep up with these changes, so it’s a good idea to work with a legal representative who can do this for you. They can also work with you to better ensure that the changes you make to your estate plan are relayed in a legally binding way that enables your loved ones to handle your affairs if you’re incapacitated and for you to care for your loved ones after your death.