Estate planning is a lifelong process, but many people don’t realize that. Many testators don’t regularly update their estate plans, which causes issues for heirs who can’t interpret the testator’s intent particular when, for example, the people appointed for certain roles have predeceased the testators or certain assets were disposed of prior to death and are no longer part of the estate.
If you’re trying to figure out when to update your estate plans, you may want to consider the following signals that some action is already due (or past-due):
1. You’ve recently married or remarried.
Possibly the most common reason to update your estate plan is that you have recently gotten married. You may wish to include your new spouse in your estate plan and name them as a beneficiary on your life insurance. You may also want to name your spouse as a power of attorney, so they can handle your medical and financial affairs if you become incapacitated prior to your death.
If you’re on a second (or subsequent) marriage and you have adult children, you may also want to carve out some agreements with your new spouse about their inheritances.
2. You’ve just gotten divorced.
Unfortunately, some marriages end in divorce. Updating your estate plan might involve removing your ex-spouse’s name as a beneficiary on your life insurance and retirement funds and making some other designations. You will also want to nominate someone else as your personal representative, attorney-in-fact, and health care agent.
3. You’ve had a child or a grandchild.
An estate plan may need to be adjusted to include a newborn child. People often nominate a guardian and set aside certain assets for their children so they can have a successful and comfortable future. Some people will also set up trusts for their grandchildren. Generational wealth is often built through careful estate planning, so that’s something you may wish to further explore.
4. There’s been a death in the family.
Some people outlive their heirs. When this happens, a testator’s wishes may go unfulfilled and the successor beneficiary of the assets may become unclear. Your estate plan may need to be revised if one of your heirs passes away. Furthermore, the death of your designated power of attorney or executor also means that it’s time to make a new plan.
5. It’s been three years or longer since you reviewed everything.
Many people often try to update their estate plans every few years. If it’s been two to three years since the last time you drafted or edited your estate plans, then it may be time to include new assets.
Is it time to update your estate plans? Contact Sjoberg & Tebelius to make sure your goals will be met.