When you have an estate plan in place, that’s wonderful. For most folks, the decision to create an estate plan is the biggest hurdle: it’s frequently difficult for folks to discuss the end of their life, and most would prefer never to think about it when the plan is done. However, that could be a potentially enormous mistake.
As you go through life, there are going to be changes. You might move into a new home, get married or divorced, have children, or change jobs. Some of these changes will require you to revisit your estate plan. If you fail to do so, you might not realize that all that planning you did isn’t working for you until it’s too late. The following are five life changes that require a second look at your estate plan, from Forbes:
- Getting married: Your new spouse will need to be included in your estate plan. You might want to include them as a power of attorney to handle your finances if you ever can’t and as a health care power of attorney to make medical decisions for you if you are ever unable to do so. You may also need to re-determine your beneficiary designations.
- Purchasing/re-financing a house: If you have a living trust, you’ll need to add your new home to the trust. Your home should be held in the name of the trust. If you re-finance your home, you’ll need to put it back in the trust when the mortgage is in place.
- Having children: If you expand your family by having a baby, adopting a child, or gaining a step-child with your new spouse, you will most likely need to update your estate plan. You’ll need to make sure that your children are protected by assigning guardians to them in your will and determining their inheritance in your will or trust.
- New accounts: If you have a trust, you will also need to make sure that all of your accounts are held in the name of the trust. If you open a new bank account, for example, in your name instead of the trust, that account will not be protected from probate.
- Divorce/death of a spouse: If your spouse is gone, you’ll need to reevaluate your estate plan. You may need to change trustees, beneficiaries, and powers of attorney to reflect this change.
Keeping your estate plan updated will ensure that you and your family are protected and that your estate plan will work properly for you. Imagine, for example, that you did not update your health care power of attorney after your spouse died and that you become gravely ill. Who will make medical decisions for you now, since the person that you appointed is no longer there? This is an unpleasant thought, but it’s an example of why you must keep your estate plan updated.
To learn more about when you should review and update your estate plan, contact a Lovett & House Co., LPA estate planning attorney.