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The when and why of updating estate plans

While drawing up a plan for your estate is a process within itself, it shouldn't be treated as something that gets signed and stashed away. For many that have put these plans into place, they can be outdated by five years or more and often don't reflect major life events - such as marriage, birth or creating a new business - which would significantly affect the way that the plan is written.

Outdated estate plans can lead to unintended consequences, issues within the family and even high-priced legal disputes.

While it is a smart idea to do a basic review of your plan from time to time, it is also important to review and update your plan if, and when, any of the following events occur:

  • Did you have a child? Did you adopt?
  • Did you have a child become an adult?
  • Did the person you named as guardian for minor children pass away? Do you have an alternative in place?
  • Did the number or circumstances of dependents change? This includes an adult that is ill or disabled.
  • Did you walk down the aisle? Or did you get divorced?
  • Was your spouse or another family member diagnosed with a serious illness? Did they become disabled? Did anyone pass away?
  • Did you buy a new house, car or any other large asset? Did the value of any of your assets change?
  • Did you start a new business or take on new financial burdens?
  • Did you get promoted or change careers?
  • Have you heard about new tax laws?
  • Are you nearing retirement? Do you have a 401k?
  • Did someone you name as executor or trustee have a change in circumstances? Is there any reason you should change this designation?

Think about each of these events and any others you may consider significant. When you meet with financial advisors or other professionals, you can ask about these issues as well. Of course, when you have a question, pick up the phone and call your estate planning attorney.

Remember, the point of this plan is to have a seamless distribution of assets and funds to the assigned beneficiaries upon your passing. However, if your plan is outdated and information is missing, this can lead to unnecessary delays and costly errors.

In general, you should review your estate plan periodically every three to five years to ensure that it is up to date. You should also review, or request that your attorney, tax professional or financial planner notify you of new state or federal tax laws that could require revisiting your plan, as they can change as well and possibly affect you and your estate.

Don't just throw your will in a lock box and think that you're covered. Keep your information current so that you can rest easy in knowing that your loved ones will be taken care of when you are unable to do so yourself.

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