Never assume that estate planning is done once you get the plan filed. It is complete, but it’s not done, per se. You still need to consider updating your plan at certain times in your life. Do not just set it and forget it.
But when should you update it? Here are a few of the more common reasons that people decide to take a second look at their plan:
You get divorced
The biggest thing to do here is to take your ex out of your estate plan. Remember that that may mean more than just taking them out of the will. They could also be named as the beneficiary on your life insurance plan, for instance, or for any other accounts that are payable on death.
Your minor children turn 18
If you do estate planning with minor children, you have to focus on different tactics to make sure they’re cared for. You may pick a guardian, for instance, or instruct that assets be held in a trust until they get older. Once they become adults, a lot of these measures are no longer needed.
Beneficiaries are born or pass away
In some cases, people you named in your will may pass away before you, meaning you want to remove them and allocate those assets to someone else. You also want to consider what to do about new children or grandchildren who are born after you create your plan. Failing to update it may mean that they get nothing for the simple reason that they didn’t exist when you made the plan.
Your assets change
Of course, you may also have to alter your plan if your assets change significantly. Don’t worry about minor changes, but consider things like buying real estate, selling a business or getting an inheritance from your own parents. The plan needs to roughly match the assets you actually control at any given time.
Do you need to start planning?
Whether you need to update your plan or start drafting one for the first time, you can see how important accuracy is. Take the time to look into all of the steps you will need to take.