Putting an effective estate plan in place involves careful contemplation about your life, then detailed drafting of legal documents that reflect those thoughts and the future you want for you and your family. Drafting a will or a trust is a great place to start, but a well-rounded plan should include several other essential documents as well, like a power of attorney or a letter of intent. But even when you’ve covered the basics and made sure to put the plans you need in place, can you truly call your estate planning “done”?
Life changes, and as it does, you’ll likely need to update your estate plan along with it. Here are the types of major life events that should cause you to reconsider your estate plans, and how you might need to adjust them to give you and your loved ones the support you really intend.
Relationship Status Can Change Your Estate Plan
Without a will, you shouldn’t assume that everything in your estate will automatically go to your spouse after you pass away. With some state laws and extenuating circumstances, your spouse may only be given a fraction of the assets left behind. But when you draft a document like a will, you can designate exactly how much of your estate you want to go to your spouse or other people in your life. This is why when you get married, it’s so important to update your estate planning to reflect exactly what property you would like your spouse to have. Even if you are not legally married on paper, if you have a long-term partner who you want cared for after you’re gone, you should make sure your estate plan says so. The law does not provide for partners the same way it does for spouses.
Similarly, if you’ve gone through a divorce and no longer want to leave any of your assets to your ex-spouse, you need to make sure to update your estate plan accordingly. Unless their share of your assets is nullified, they may still obtain your property after your passing when you don’t want them to. This also applies if you’ve previously designated your ex-spouse on life insurance policies, retirement accounts, or as the agent who will handle your financial affairs and make medical decisions on your behalf. If you no longer think their beliefs or decisions reflect what you want for yourself, then you must make sure you update your estate plans to exclude them from having any of those responsibilities. It would likely be a favor to them as much as it is a favor to yourself.
Family Members Can Change Your Estate Plan
When you put together an estate plan, it’s often under the assumption that you will pass away before your spouse and will be leaving your assets to them and whomever else you designate. But it’s important to consider what might occur should your spouse die before you. When that happens, you may no longer have a central beneficiary to leave your assets to, as designated in your estate plan. So, you will not only need to adjust your will accordingly, but you’ll likely need to designate someone new as your power of attorney, health care proxy, and trustee if you have any sort of trust established. Your life insurance policies and retirement accounts should also be updated to include new beneficiaries if your spouse was the only one.
Having a child also instigates major changes when it comes to your estate plans—you have a brand-new beneficiary you’ll need to include. Whether you’ve had a child through birth, adoption, or even fostering in some scenarios, the proper estate plan updates should actually go beyond including them as beneficiaries in your will. You will need to seriously consider guardianship designations, or who you want raising your minor children should something happen to you and your spouse. Estate planning for your children involves other important considerations as well, such as clear instruction for how you desire they be raised, and deciding how to distribute your assets to them and their new caretakers. These are all details that need to be included as updates to your plan whenever a new child becomes part of your family. It’s also never safe to assume that designations spelled out for your first child will automatically be applied to your second or third child. Update your estate plan for each new child as they arrive.
Your Assets and the Law Can Change Your Estate Plan
Major changes to your own estate often warrant changes to your estate plans, and more specifically, the designations detailing what will happen to your newly acquired assets. For example, if you’ve recently purchased new property or the value of the property you already own has drastically changed since you put together your estate plan, you may want to reconsider how said property will be divided. Similarly, if you recently came into a large sum of money by way of a gift, lottery winnings, or inheritance, you will also need to update your estate plan to account for these major changes. The numbers spelled out in your current plans may no longer apply and will need revision.
Changes to your own life should be clear indicators for considering updating your estate plan, but outside forces can also have an impact on the decisions you make for your estate. In recent years, significant changes have occurred with tax laws. For example, estate tax exemption amounts have changed, and the exemption may now provide for additional planning opportunities to minimize future taxes for your beneficiaries when they inherit your estate. Changes to laws and rules like this are important to pay attention to because they may affect your estate and how it’s distributed without you even knowing. This is when having an expert estate planning attorney review your plan can be so beneficial.
The Whisler Law Firm cares deeply about you and your family’s wellbeing. It’s why we have only the best estate planning lawyers on our team. We can help you put the right plans in place, whether they’re brand new or you need to make important updates to the plans you already have. And if you aren’t sure about what kind of estate planning is right for you and your family, take advantage of an entirely free consultation with us by calling 833-529-5677 or filling out our online form. We’ll help you make sure you’re prepared to take care of your loved ones no matter what life has in store for you.