Many individuals will take the time to develop a comprehensive estate plan and then avoid revising it when necessary. While most experts agree that all the estate planning documents should be reviewed every three to five years to identify necessary changes, there are three significant life events that should immediately lead to a revision.
A well-drafted estate plan is critical to an individual’s peace of mind and comfort knowing that surviving loved ones and minor children are cared for in the future. However, three events typically mean some elements of the plan should be adjusted, including:
- Change of marital status: Whether it is a marriage or divorce, the change of marital status should immediately trigger revisions to the estate plan. Removing an ex-spouse from your will, trust or life insurance is just as important as adding your new spouse to these same documents. Additionally, if the marriage involves new stepchildren, further revisions are necessary.
- New additions to the family: Whether it is the birth of a child, a successful adoption or, as mentioned above, children in marriage, new additions to the family should lead to revised estate planning documents. Trusts can be created for these minor children as well as specific inheritance can be mentioned in a will.
- Death of a loved one: While many people think ahead to add secondary beneficiaries or alternate proxies, the death of a loved one should trigger changes to various aspects of your estate plan. Whether you are identifying a replacement executor, a new power of attorney or a different individual to receive an inheritance, these changes should be made as soon as possible.
While these suggestions represent significant events, there are numerous other factors that could necessitate the changing of estate planning documents. Purchasing a new home, for example, or changing familial relationships might all lead to new terms. These changes should be made as soon as possible to avoid confusion and unnecessary delays in the future.