Oct 2014

When Should I Update My Estate Plan?

Estate Planning Answers

If you have a will or an estate plan that includes the full range of estate planning documents, you may think you’re set for life. After all, you’ve done the hard work of sitting down with a lawyer and creating these important legal documents. Shouldn’t your estate plan protect you in the long-term?

Not so fast. Although you have taken an important first step toward ensuring your financial future – and that of your loved ones – is secure, it’s equally important to review and, if necessary, revise your estate planning documents over time. As your lifestyle and your circumstances evolve, it’s important to revisit your estate plan as major life events unfold.

What Triggers an Estate Plan Review?

Although everyone is different, there are several big life changes that signal it’s time to take a look at your estate planning documents.

Divorce

If you’re contemplating divorce or you have recently finalized a divorce, it’s important to change your beneficiary designations and update your will, trust, and other estate planning documents. If you fail to remove your spouse as a beneficiary for certain assets, such as retirement accounts, your spouse could still inherit them. This point was driven home by the U.S. Supreme Court in Kennedy v. DuPont, in which it ruled that an ex-wife was still entitled to her ex-husband’s Individual Retirement Plan (IRA) benefits even though their divorce decree explicitly stated that she was no longer entitled to anything from his IRA.

Marriage

Similar to divorce, marriage (or remarriage) is a big life change that should also mean big changes for your estate planning documents. If you fail to add your new spouse to your retirement plans and other accounts and documents, you could unintentionally leave your loved one without important financial support.

Birth

The birth of a new child is a joyous event and, for most, a major lifestyle change. Unfortunately, many new parents, caught up in the day-to-day business of everyday life, fail to recognize the importance of updating their estate plan. For example, it’s important for all parents to designate a guardian for their kids in the event the parents die while the children are still minors. Whether you’re a first-time parent or an old pro, you will also want to include your new addition in your estate planning documents. The same goes for adoptive parents.

Inheritance

If you have inherited a large sum of money, or you have accumulated any significant amount of assets, it’s wise to review your estate plan. There are many tax implications involved in estate planning, which means it’s a good idea to consult with your lawyer regarding the best way to structure your estate.

Death

A loved one’s death should always trigger a review of your estate plan. Too often, people who have lost a spouse believe that they don’t need to update their estate because they assume everything will simply pass to their children. What they fail to realize is that losing a beneficiary often leaves them without any secondary beneficiaries or, in the case of powers of attorney, alternate agents.

Springfield, Missouri Estate Planning Attorneys

These aren’t the only events that can prompt a need to review your estate plan. A cross-country move or a sudden illness can also mean changes for your life and your estate. Don’t leave your estate plan – or your future – to chance. Contact the estate planning attorneys at the Law Office of Randy L. Smith, LLC today at (417) 841-2775 to schedule an estate plan review and consultation.

This website has been prepared by The Law Office of Randy L. Smith, LLC for informational purposes only and does not, and is not intended to, constitute legal advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.