While people devote the time and energy necessary to create a comprehensive estate plan, many of these same people fail to keep these documents updated. Even though it might feel like just one more thing to remember during a stressful life event, ignoring the opportunity to reflect these changes might lead to heated disputes in the future.
Financial planners tend to agree that estate planning documents should be reviewed every three to five years to ensure consistency and accuracy. Additionally, there are four factors that should immediately necessitate estate planning refinements.
- Marriage and divorce: This change to the family dynamic is perhaps the most common. Whether you are adding a spouse or removing a significant other, it is crucial that you update the estate plan accordingly.
- Children: The addition of children to the family should immediately trigger estate plan changes. These could be children born into the family, children of a blended family following a marriage, or adopted children. In any event, you should look to an experienced estate planning attorney who can provide guidance in ensuring your documents fully reflect the realities of your life.
- Changes to beneficiaries: When wills and trusts are created, they generally reflect the reality of current relationships. As life goes on, however, those relationships change. It’s possible that you’d rather bequeath items to a different person or a new friend is made a trustee. Whatever the event, it is crucial that the estate planning documents reflect your wishes.
- Tax changes: Whether you are ensuring your estate plan is compliant with changing regulations or you are reviewing your documents for compliance after a state-to-state move, it is important to work with an estate planning attorney who can answer your questions.
It is easy to become overwhelmed with serious life events. It is important, however, to remain focused and detail-oriented. Estate planning documents that do not reflect the realities of your life can open up heated debates and emotional disputes upon your passing. Work in the present to avoid problems in the future.