Creating an estate plan is a great first step in securing your finances and assets, but it should not be a static document. Many people forget about their estate plan once it is created. Certain fluctuations in your life can cause your plan to be ineffective. Here are some circumstances that should cause you to make some changes to your estate plan.
1. You got divorced or your spouse has passed away
Both divorce and the death of a spouse can be highly consequential to your assets. Your spouse is more than likely named in your estate plan as an executor, power of attorney or beneficiary. In the case of divorce, you might not prefer your ex to be in charge of overseeing your health or finances should things go south.
2. You had children
Maybe you made your estate plan before children came into the picture. It is important to designate a guardian in your will for your children. You may also consider setting up a trust to set aside some assets for your children. When your children become adults, you may want to update your plan again, such as naming your children as executors or doing away with a trust.
3. Your assets have increased or decreased
An essential part of estate planning is preparing for your estate tax. If your estate starts small but ends up growing, you may want to revise it to minimize your estate taxes. On the other hand, you may start off with a plan that deals with tax planning but experience a loss of assets. In this circumstance you may want to update the plan to be focused on other aspects.
4. Your health changes
If you created your estate plan when you were healthy, you might not have envisioned someone else making health decisions for you. Unfortunately, this is something that happens. If you were originally not concerned with who will be responsible for your medical decisions but have recently gotten sick, you may want to change your estate plan.
Estate planning is something that many people start and do not think about for years or even decades. The problem is things change. Your plan may need a few updates or complete overhaul depending on how much your life has transformed. If you are newly divorced, recently had children, have seen a chang e in your assets or noticed your health suffering, you want to make sure your estate plan reflects your current desires. Make sure you look over your estate plan with an attorney.