Estate Planning at Key Times

estate planning

For many of us, the simple act of creating an estate plan may seem daunting and, once done, we tend to put it in the “completed” pile. But it’s important to remember estate plans are created at a certain point in our lives with provisions made based on our life and family circumstances at that moment. One thing is certain about life – circumstances will change. Children are born or grow older, marriages sadly end, new relationships are formed, and so on. A good rule of thumb is to review your estate plan every three to five years or so to ensure all your assets are considered, your wishes are accurately reflected, and your beneficiaries are up to date. However, there are some life events that directly impact our estate planning and should trigger a thorough review so that necessary changes can be made.

So, what are those life events? Here are just a few that will have an almost certain impact on your estate planning.

The birth or adoption of a new child or grandchild.

When you have your first child, that is a time to create or modify your estate plan to nominate guardians and provide for their financial future in the event of a premature death. Similarly, when you have your first grandchildren, that also is a time many people modify their estate plan so as to benefit not only children, but also grandchildren.

Your children or grandchildren become adults.

We often establish our estate plans when children and grandchildren are younger. As they attain adulthood and begin their own careers and families, what assets you want to make available to them and when may change. For instance, some children may prove to be financially responsible and mature at a much younger age than expected, whereas others may demonstrate an inability to manage money or make responsible decisions. For more on this topic, see ‘The Children Are Grown – Is Now The Time to Re-evaluate Your Estate Plan?’ 

You’ve gone through a divorce.

Revising your estate plan should be one of the first things on your list after a divorce as it’s likely your former spouse is named as beneficiary on your insurance policy, will, or trust, and you may have named them as your healthcare and financial agent under durable power of attorney documents. Although a divorce in many states effectively will remove a former spouse as a beneficiary of a will or trust, it is best not to rely solely upon that possibility – rather, you should take the time to review and update all of your documents to make sure they reflect current wishes.

You’ve remarried.

Your new spouse should be considered in your estate plan. And, if your remarriage has resulted in a blended family, bear in mind that stepchildren are not usually considered as beneficiaries under the law unless they are specifically named and included in your will and estate planning documents.

Someone named in your estate plan predeceases you.

If anyone who is part of your estate plan in any capacity – beneficiary, executor, named agent under a power of attorney document, or guardian – predeceases you or becomes seriously ill or disabled, their role and/or beneficiary status should be reviewed and adjusted/changed as needed.

You experience a permanent relationship change with a beneficiary.

While the normal ups and downs of relationships shouldn’t impact someone’s beneficiary status, there are times when those relationships are permanently changed or result in estrangement. In those instances, you may want to revisit the provisions you’ve made for that individual, and identify other individuals to fill the roles you had designated for them.

You relocate.

Every state and country has their own laws regarding inheritance and estates, so it is important not to assume your existing plan will work in your new location. Connecting with an estate planning attorney or law firm in your new place of residence will help you identify and make the needed revisions to legally support and protect your estate plan.

If you think of your estate plan as a living document that is reviewed regularly and adjusted as necessary to reflect the inevitable changes life brings, the more effective it will be in ensuring your wishes are accurately carried out and your loved ones are well taken care of. If we can help you establish or review your existing estate plan, contact us.