As Circumstances Change, So Should Your Estate Plan

Summary

Life changes all the time. As it does, your estate plan should change with it. Most estate planning lawyers recommend revisiting your will and trust every three to four years. Additionally, revisit it if you experience any of the following circumstances:

1. You get married, get divorced, or lose your spouse.
2. Your financial situation changes, either for good or for ill.
3. You either launch or dissolve a business.
4. You experience the birth, adoption, or death of a child or grandchild.
5. Your personal or family circumstances change in other ways, including geographic relocation.
6. Your goals change; for instance, you decide to change who inherits what, or you want to add a charity to your estate plan.
7. Find out more about revisiting an estate plan. Connect with Max Alavi APC, OC Trusts Lawyer.

As Circumstances Change, So Should Your Estate Plan

Your estate plan was designed to address your needs, goals, and aspirations as you see them, not reflecting both your present financial realities and your current family dynamics. But in life, the one constant is change… and as your life takes new twists and turns, it’s important to ensure your estate plan is up to date.

When Should You Revise Your Estate Plan?

There are a number of circumstances in which it might behoove you to update your estate plan. Six of the most common reasons are:

1. You get married, get divorced, or lose your spouse.
2. Your financial situation changes, either for good or for ill.
3. You either launch or dissolve a business.
4. You experience the birth, adoption, or death of a child or grandchild.
5. Your personal or family circumstances change in other ways, including the need to replace trustees, address disabilities or addictions, a geographic relocation, etc.
6. Your goals change; for instance, you decide to change who inherits what, or you want to add a charity to your estate plan.

One more thing: Just as your life changes, the federal and state laws that affect estate planning can change, too. Regularly reviewing your estate plan with a qualified attorney can ensure you’re up to date on the latest regulations.

Updating Your Will and Trust: Case Studies

To further illuminate the reasons why you might change your estate plan, consider this example.

Bob and Jill have been married for 20 years, and have three kids. Some years ago, they set up a living trust to ensure their family’s needs were taken care of in any contingency.

Since that time, their family has endured many changes, some good and some bad. Let’s take a look.

Divorce. Bob and Jill’s oldest son divorced his wife. Now the family needs to update their trust to exclude her as a beneficiary.

Changes in financial status. When Jill’s aunt died, she left Bob and Jill a great deal of money. They need to update their estate plan to properly allocate this money, and to plan for tax implications.

Birth. Bob and Jill’s daughter just announced that she is expecting a child. Naturally, Bob and Jill want to ensure their grandchild receives a portion of the family inheritance.

Changes in personal circumstances. The youngest son was involved in a car accident that left him severely injured, unable to work. He is eligible for government disability benefits, but getting income from a trust would disqualify him. Bob and Jill likely need to set up a special needs trust.

Changes in tax law/venue. Changes in Federal Law that may result in your estate being a taxable estate.

How Often Should You Check in on Your Estate Plan?

As a rule of thumb, it’s wise to check in with your estate planning attorney every three or four years. You may wish to review your plan more frequently if you go through any major life changes, like the one’s Bob and Jill experienced.