After creating an estate plan, it’s natural to feel better about your current circumstances and what would happen in the event of your incapacitation or death.
Even with a comprehensive estate plan that touches on all key details, it’s critical that you review it regularly. There are likely to be points during your life when you need to update your estate plan, including the following:
- Divorce or marriage: Either of these should have you rethinking and reworking your estate plan. For example, if you marry, you may want to immediately name your spouse as your sole beneficiary. Just the same, divorce will alter your situation, such as who you name as your health care proxy and how you plan for retirement.
- New state or federal laws: Estate planning laws change from time to time, and when this happens it’s critical to review your plan. Even if a change isn’t necessary, you’ll end up with more knowledge of the new law and how it could impact you in the future.
- New child: It doesn’t matter if you give birth to a child or adopt, it calls for an estate plan review. This is a good time to review your guardian designation or make one for the first time (if it’s your first child).
- Substantial change to the value of your estate: The value of your estate can increase or decrease over time, which often alters your strategy. Take, for instance, someone who wins the lottery or comes into a large inheritance. A large sum of money will alter your plan, such as whom you want to leave it to.
- The passage of time: Don’t wait for a particular life event to review and update your estate plan. Instead, get into the habit of doing this every year. You won’t find something to change at every review, but it will give you peace of mind.
There is no right or wrong time to update your estate plan, but there are specific times when you should review what you already have in place.
If your review turns up any areas that require your attention, don’t hesitate to make the necessary changes. Letting these linger for any period of time is a risk that you don’t want to take, as you never know what the future holds.