Estate planning is crucial in ensuring the proper distribution of your assets according to your wishes when you pass away. Unlike what most people think, an estate plan is a dynamic tool, not a one-time event. Hence, you should make it a habit to periodically revisit yours to ensure that it reflects changes in your life, financial situation and the law.
Here are common life events that trigger an estate plan review:
Changes in family
Major life events affecting your family, such as marriage, divorce, the birth of your child or the death of a family member, necessitate an immediate review of your estate plan. These events may alter your relationships and priorities, requiring asset distribution and beneficiary designation adjustments.
Shifts in finances and assets
Significant changes in your financial status, such as receiving an inheritance, experiencing a substantial increase or decrease in assets or starting a new business, are reasons for you to review and update your estate plan to ensure it aligns with your current financial situation.
Updates in estate planning and relevant laws
Laws on estate planning and tax regulations related to it can change. It is crucial for you to stay informed about relevant updates in the law and assess how they might impact your estate plan. In certain circumstances, you may need to revise your plan to optimize tax benefits or comply with new legal requirements.
Aligning your needs and plan to realize your goals
An estate plan is not set in stone. Regular reviews and updates to your estate plan are vital to ensure that it effectively captures your wishes and protects your loved ones’ future. Consequently, failure to update your estate plan can lead to serious repercussions to you, your family and your assets.