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When should I update my estate plan? 3 examples

On Behalf of | Oct 18, 2022 | Estate planning

Getting an estate plan is the first step. Keeping it up to date, the second and often forgotten step. There are certain life events that trigger a need to review an estate plan and make sure it still meets your needs. Three examples include the following.

#1: Change in family structure

Marriage. Divorce. Birth of a family member, death of a family member. Any of these events that change the core structure of a family should trigger a review of an estate plan. Without a change, unintended heirs could get assets that you would prefer to go to other family members or charitable organizations. Or you could unintentionally leave a loved one out of the plan.

Related to this example is the chapter of our life. Parents of young children will want to make sure their plan includes guardianship documents and those who are later in life or suffering an illness will want to update healthcare directives and power of attorney documents.

#2: Change in financial portfolio

Maybe you got a windfall from an inheritance or lottery winnings. Perhaps you sold business interests or had an invention that took off in the market. Whatever the reason for a change in finances, it should trigger a review of your plan. When you originally put together the estate plan a trust may not have made sense. With more assets, you may find this legal tool more beneficial.

#3: Retirement

Making the shift to retirement is a big deal. Take some time to celebrate and then schedule a moment to review your plan. Make sure it still serves your intended purpose and make changes if needed.

Bonus: Reduce the risk of conflict by communicating your wishes

Whenever possible, having a conversation with those who are most impacted by your plan can help to reduce the risk of a conflict. The conflict could come from a good place, perhaps a child believes they know what you really wanted, and it is not truly reflected in the plan. Whatever the reason, transparency can help to reduce the risk of a long and potentially expensive legal battle between those who are trying to make sure they honor your wishes.