4 Reasons Why It’s Time to Update Your Estate Plan
If you have set an estate plan, you are far ahead of the vast majority of Americans. Although more than 50% of American citizens believe estate planning is important, only 33% of them have set a will or a living trust plan. However, having an estate plan is not enough. You must review it regularly to ensure that the plan still fits your evolving life. The review should happen every three to five years or after a significant life change.
While some people believe that reviewing the plan is the only thing you should do, this is not the case, you should be familiar with all the basics of estate planning if you are keen on securing your legacy. A comprehensive estate plan may include a testament, a living will, a revocable living trust, a power of attorney, and other documents. If you own a business, make sure to include your life insurance, retirement plans, and business plans.
As you can see, this can be a lengthy process, particularly if you wait too long to update the documents. If you update as things change, you can complete the process quickly.
In this article, we will highlight four reasons why you should update your estate plan.
You moved to a new state
Each state has its own estate planning laws. For example, some states require a spouse to inherit a certain percentage of the estate. Other states continue to levy inheritance taxes. Powers of attorney, living wills, and advanced medical directives are all subject to state law.
Update your estate planning documents after moving to a new state, as old ones will become invalid. Work with a local estate planning attorney to establish proof that you recently relocated. It is especially important if you have a lot of assets and leave the state with inheritance taxes. Your old state may tax your estate if you do not change your address. So, hiring an attorney is crucial.
For example, if you moved to Monroe, North Carolina, perform detailed research to find the best attorney in this area. Then, find out what type of services an estate planning attorney in Monroe offers and set up a meeting. Once you agree on everything, start updating your documents. It is not an easy process, so working with an experienced attorney will make things easier.
You got married
Changes in your life occur constantly, so update your estate plan immediately. For example, if you recently got married, make sure that you include your new spouse in the estate plan. If you have previously been married, you should also remove your ex-spouse from this plan, if you have not already done so.
Additionally, you don’t have to be legally married to have your estate plan revised. If you want to take care of your partner but are not married, now is a good time to do that. This is important because if you are not legally married, your partner may not receive anything under state law. This is true for both domestic partnerships and common-law marriages.
You have children
If you have children, reviewing the estate plan in light of your new family dynamics would be good. If your partner has children from a previous relationship or marriage, you can include them as beneficiaries in your will. Additionally, stepchildren typically aren’t included unless specifically mentioned, so if desired, make sure all of your biological and adopted children become part of it. Your estate plan will then cover all your children, regardless of their status. You should also specify in the plan who will be their guardian if you are no longer alive.
You bought new assets
If you’ve purchased new assets since your last estate plan review, reconsider whether your current plan is still the best option after your recent life circumstances. A will serves many people well but does not keep your assets out of probate, whereas a revocable living trust does.
Additionally, an estate planning attorney can assist you in establishing irrevocable trusts to reduce estate taxes. If, on the other hand, you have significant debts, you can consult an estate planning attorney to learn about options for easing the burden on your loved ones, or even putting speciﬁc assets out of reach for creditors.
As you can see, there are numerous reasons to update your estate plan. Reviewing your estate plan is essential and should be done immediately after an important life event occurs. A qualified estate planning attorney will review and validate your plan to ensure it remains valid. Completing these things will bring tranquility to you and your family.