If you have already drafted an estate plan, that’s a great starting point. However, estate plans require periodic reviews. They may also need to be updated in specific circumstances.
Regular updates help keep everything aligned with your current situation. Here are some key times to review and update your estate plan.
Significant life events
Significant changes in your personal life should inspire a review of your estate plan. Your plan may need adjustments if you get married, divorced or have a child. Similarly, if a beneficiary or executor passes away, you should update your documents to implement new choices for these roles.
Changes in your wealth
A substantial increase or decrease in your wealth can affect your estate plan. If you receive an inheritance, start a business or acquire valuable assets, you may need to update your plan. The same applies if you face financial hardship, as this could impact the distribution of your assets.
Legal updates
Estate planning laws constantly change, and new tax rules may affect your estate. Regularly reviewing your plan ensures it complies with current laws. You may also be able to capitalize on estate tax advantages.
Moving to a new state
If you move to another state, your estate plan may not align with the laws. Each state has different rules regarding wills, trusts and powers of attorney. Updating your plan ensures it remains legally valid where you live.
Even without major changes, your estate plan should be reviewed every year or two. This helps you catch any outdated details and make necessary adjustments. For more information, you may find it helpful to seek legal guidance.