An estate plan is what’s known as a living plan, meaning it can change with you as life changes occur. Estate planning documents should be reviewed every few years, but there are also five life changes that should trigger a review or update to an estate plan.
1. Marriage or divorce
Your spouse has rights to an estate under many state laws. Obviously a change in marital status needs to be addressed in estate plan.
2. Birth of a child
Even before a child is born, you need to begin considering who you would like to choose as a Guardian should the unthinkable occur. This task can stop many parents in their tracks, but it would be even worse to have a court make that choice for you.
3. Moving to a another state
The laws involving estates, wills and trusts are made at the state level. Should you move to another state, your estate planning documents should be reviewed by a local estate planning attorney to ensure they are consistent with any differing state law.
4. Death of an Executor or Beneficiary
While you should have a successor Executor named in a will, should any change occur with an Executor or Beneficiary, the will should be updated to reflect it.
5. Buying or selling a significant asset
A large asset may need special handling within an estate plan, such as a primary residence, a business or a large stock portfolio. For example: You may want to establish a Living Trust to handle a large portfolio of financial instruments where you may appoint a Trustee to manage the portfolio should you become incapacitated and to smooth the transfer of the assets while avoiding probate upon your passing.
Review of an estate plan may not be on the top of everyone’s ‘to do’ list, but it’s necessary to ensure that these documents stay current and meet your estate planning goals.