Estate planning is an important part of life to account for which is why having an estate plan is an essential part of life. Equally important is knowing when to update an estate plan and ensuring it is kept up-to-date once it has been developed.
Life is full of changes and it is a good idea to update an estate plan whenever the estate planner experiences any major life change including:
- The estate planner experiences a major relationship change: Whenever the estate planner experiences a major relationship change in their life that would impact their estate plan, it is a good idea to revisit their estate plan and update it to reflect the relationship change. This could include the birth of a child, a marriage, divorce or death of someone named in the will, for instance.
- The estate planner moves to another state: Whenever an estate planner moves to another state, they should look over their estate plan to ensure it complies with the laws in the new state where they will be living. Certain requirements must be met for a will, for example, to be valid, and these requirements can vary by state, so estate planners should ensure their estate plan meets all legal requirements in their new state.
- The estate planner’s assets and liabilities change: Because one of the primary purposes of an estate plan is to distribute the estate planner’s assets to beneficiaries, if the estate planner’s assets or liabilities change, their estate plan should include and account for those changes. Additionally, if trustees or others named in the estate plan become out-of-date designations they should also be updated.
- The estate planner needs to update beneficiary designations: The beneficiary designations on life insurance policies and retirement accounts are controlling so estate planners should ensure those designations are current and align with their estate plan.
An estate plan is less useful if it doesn’t accomplish the desires of the estate planner for how their estate will be distributed and the beneficiaries it will be distributed to. As a result, maintaining and estate plan is an important as the initial estate planning process so estate planners should know when to update their estate plan.