How Often Should I Update My Will or Estate Plan?

Estate planning is a crucial aspect of securing your family’s future, yet many people overlook the importance of regularly updating their estate plans. Life changes can have significant impacts on how you want your assets distributed, and failing to keep your estate plan current could lead to unintended consequences. 

On average, you should review and update your estate plan every 3-5 years. But life is unpredictable, and certain events may necessitate a more immediate update.

Important Times to Update Your Will or Estate Plan

 

1. Marriage

Marriage is one of the most life-altering events, and it should immediately trigger an update to your estate plan. You’ll want to ensure your new spouse is adequately provided for in your Will and trusts, as well as update any beneficiaries on your life insurance policies, retirement accounts, and other assets. 

Additionally, updating your power of attorney to include your spouse is crucial to ensure they can make financial or healthcare decisions for you in the event of your incapacity.

2. Divorce

Divorce is another significant life event that demands immediate action regarding your estate plan. Without updating your plan, there’s a chance that your ex-spouse could inherit a larger portion of your assets than you intended. 

After a divorce, you should update your Will, trusts, and beneficiary designations to reflect your new wishes. If you’ve named your ex-spouse as the executor of your estate or the beneficiary of retirement accounts, these should also be adjusted.

3. Bearing Children

Welcoming a new child into your life, whether through birth or adoption, is an exciting and joyous occasion that should be reflected in your estate plan. You may want to create a trust for your child to ensure they’re financially supported in the future. 

Additionally, naming a guardian for your minor children in your estate plan is essential for ensuring they’re cared for by someone you trust if something happens to you.

4. Dealing with Family Deaths

The loss of a family member can affect your estate plan in several ways, especially if that individual was named as a beneficiary or executor in your plan. 

If someone listed in your estate plan passes away, it’s important to update the plan to remove them or assign their share to another beneficiary. This ensures your assets are properly distributed and prevents legal disputes among your surviving family members.

5. Acquiring Significant Property

Buying a new home, receiving an inheritance, or coming into a large sum of money are all significant life events that should prompt a review of your estate plan. You’ll need to decide who will inherit these assets and how they should be distributed. 

Failing to account for new property or wealth in your estate plan could lead to those assets not being distributed according to your wishes.

6. Starting or Dissolving a Business

If you start or dissolve a business, it’s important to update your estate plan to reflect these changes. You should specify what happens to the business if you become incapacitated or pass away. 

An updated estate plan can prevent the business from falling into disarray or being handled by someone who doesn’t have the knowledge or experience to manage it properly.

7. Moving Between States

Relocating to a different state often involves new laws regarding estate planning, taxes, and property distribution. Different states may treat assets and financial arrangements differently, which could complicate your estate plan if not updated accordingly. 

If you move to another state, it’s important to consult with an attorney to ensure your estate plan is compliant with the laws of your new home.

8. Significant Financial Changes

A dramatic increase or decrease in your financial situation should trigger a review of your estate plan. Whether it’s a promotion that significantly boosts your income, a sudden windfall, or a financial downturn, your estate plan should reflect your current financial status to ensure assets are distributed in line with your wishes.

Protecting Your Legacy Through Regular Estate Plan Updates

Life is constantly changing, and your estate plan needs to keep pace with these changes to protect your loved ones and ensure your wishes are carried out. By revisiting your estate plan every few years and after significant life events, you can have peace of mind knowing that your assets will be distributed as intended. 

If you need to update your existing estate plan or have yet to create one, don’t hesitate to reach out to our team! We are ready to partner with you in this important endeavor.