Your estate plan helps protect your family and lets you sleep peacefully at night knowing you will leave no unresolved issues if you die. You may have invested many hours of careful consideration into the estate plan you created. It is normal to expect those documents to hold up for years after you create them, if not for the rest of your life.
However, most testators will benefit from having accurate and up-to-date documents, as outdated paperwork offers less protection and can be more susceptible to challenges in probate court. What are some of the most common reasons that people decide to update their estate plan?
They get married or divorced
Marriage means sharing almost everything in your life with another person, so your spouse will play a major role in your estate plan. They may be the beneficiary of your life insurance policy and the person who receives the vast majority of your property if they outlive you. When you get married or divorced, you may need to review your estate documents to add or remove your spouse.
They add new children to the family
Whether through pregnancy or adoption, your family may have recently grown. While you can certainly use generic terms for the distribution of your assets in your estate plan, it is often best to specifically talk about individual children and beneficiaries in your documents. Updating your estate plan when you have new children is important for protecting their right to inherit.
A beneficiary or person with authority dies
You name people to receive your property and others to handle your financial matters or support your children if something happens to you. When the individuals receiving property or performing an important role in your plan die before you, you need to update your documents to remove them. In fact, some people will need to take this step when they find themselves estranged from family members.
When you add new property to your portfolio
Did you finally save up enough money for a vacation home or start a business when you were just five years away from retiring? When you add major assets to your personal property, you need to consider those assets in your estate plan as well. In fact, for some people, new property could push their estate plan over the threshold for estate taxes.
Knowing when to update your existing estate plan will help you make the most of the documents you have already created.