How Often Should I Update My Estate Plan?

If you created an estate plan or will, it is important to review and update them regularly. If you have not planned for your estate or any other end-of-life plans, now is the time to do so. According to a Gallup poll in 2021, over 54 percent of American adults do not have a will.

It is advised that you revisit your estate plan or will every few years, but should a major life event occur, then a review of your estate plan may be necessary earlier than planned. Some major life events that should prompt you to review your estate plan include:

• Marriage or divorce: After the major event of a marriage or divorce, you would want to update your estate accordingly, as spouses play major roles in all estates. A spouse could be an executor, a trustee, or financial or health care agent who handles your affairs when you are unable to. On the other hand, following a divorce, everything done to your estate after the marriage will have to be undone.  
• Illness: Following a major illness, it is a good idea to take a look at your estate and make sure everything is up-to-date, especially naming the person who will make your health decisions for you should you become incapacitated. Becoming sick also may alter your financial situation, so you may have to update your estate for that as well. Make sure everything reflects exactly what you want once you are gone, which can give you peace of mind to focus on your health.  
• Birth of a child: After the birth or adoption of a child, putting them in your estate will help protect your legacy. When you name your child in your will, you will need to change your estate plan to include a guardian for them should both parents die before they reach adulthood, as well as when or how your child receives your assets.
• Purchasing a house, property, or other large asset: Should you experience a major change in your financial portfolio such as purchasing a house, winning the lottery, or investing, you should reassess your estate.
• Retirement: Retirement can take years to prepare for and plan, but most people forget about reviewing their estate plan once they have finally retired. When you do retire, you may have grandchildren and while reviewing your estate, you may want to restructure it to add any grandchildren as beneficiaries.
• Priorities or assets change: If you experience a life event that drastically changes the value of your estate, then reviewing all of it is highly recommended, whether it has been increased or decreased. If you take on a new or gifted property, you may want to divide the property or come up with a new plan instead of the previous drafted one.

Other major life events that occur that may make you consider reviewing your estate plan include:  

• Death or change to executor or trustee.
• Career change.
• Changes in number of dependents.
• Disability of yourself or spouse.
• Receiving a large inheritance.
• Death of a family member or if someone becomes ill.
• Taking out a large loan amount.

Reviewing your estate plan after these and other life events help preserve your legacy and makes sure your final wishes reach your loved ones and beneficiaries.

Relying on Others

The executor of your will is the person you name to carry out your wishes, which is an important job. Your executor makes sure the beneficiaries you had named get the assets you wish, as well as pays off any debts and any assets you may have left to your name, like your home.

Even though your estate is about you, it closely involves the loved ones you trust to take care of your wishes. There is not just the executor, there is also the guardian you would want to take care of your children, those who have powers of attorney if you are unable to make health decisions on your own, and others that can handle your financial affairs.

It is a good idea to review your estate every few years, as relationships change and people who you have assigned to certain roles in your estate plan may change as well. Sometimes people you chose to perform one duty may not be as fit for that role after all.

Beneficiaries

Outside of your will and estate, there are assets that can be given to other beneficiaries, such as through your 401(k) plan, retirement accounts and life insurance policies. Beneficiaries on those accounts may sometimes differ what your will states, so you would want them both on the same page.

You want to make sure you are aware of this and keep it up to date if necessary. Some bank accounts and 401(k) plans can automatically require a spouse to be a beneficiary, so be sure to check for this requirement when planning your estate. If the requirements and terms of your estate are left blank, your assets will go into probate and be given out evenly amongst your heirs.

Should you experience any of these or other major life events, you should consider seeking the guidance of your lawyer sooner rather than later. Failing to do so may put your family in a difficult situation if your estate is not updated completely to your wishes. This could mean putting some of your assets and property into probate, which could take months, if not years to reach a resolution.

Plainfield Wills, Trusts, and Estates Lawyers at Herold Law, P.A. Can Help You Update Your Estate Plan

It is impossible to predict what may happen tomorrow, but you can help yourself and your family by preparing as best as possible. Our Plainfield wills, trusts, and estates lawyers at Herold Law, P.A. can help you update your estate plan and answer any questions you have. Call us today at 908-647-1022 or fill out our online form for an initial consultation. Located in Warren, New Jersey, we proudly serve clients throughout Plainfield, as well as the surrounding areas.

• Category: Estate Planning