Updating Your Estate Plan: When Is It Necessary?

Couple holding out keys to new home. Concept for When to Update Your Estate Plan

Putting an estate plan in place provides you with the peace of mind that comes from knowing that you have taken care of yourself and your family for the future. To maintain the sense of accomplishment, you need to make sure you keep the plan current. That means updating your estate plan when your personal or financial situation changes. When specific circumstances occur in your life, it’s essential to update your estate plan.

Marriage or Divorce — Yours or a Family Member’s

Your own marriage or divorce is one of the most common — and most important — reasons for updating your estate plan. Either event likely requires significant changes in several of your estate planning documents, including your will, trust (if you have one), durable power of attorney, and advance directive. If you own assets with beneficiary designations, such as life insurance or a retirement account, those also need to be updated. Your estate planning lawyer makes certain that you cover all the necessary bases when you update your plan after marriage or divorce.

The marriage or divorce of a family member may also necessitate changes to your estate plan, if the family member is a potential beneficiary of your estate. The marriage of an adult child is a particularly significant event that may prompt you to make changes in your estate plan to ensure that your family legacy stays in the family.

If a marriage (yours or a family member’s) is not the first marriage for either spouse, estate planning issues can be particularly critical to address. Updating your estate plan is especially important if the marriage creates a blended family that includes children from a previous marriage of either spouse.

Family Birth or Death

A birth or death in your family is another frequent reason that necessitates making revisions to your estate plan. The changes may relate to beneficiary designations, as well as fiduciary designations.

The arrival of grandchildren often prompts grandparents to make certain that their estate plans provide for the financial well-being of a new grandchild. As your family expands and grows, protecting your financial legacy becomes more and more important. The right provisions in your estate plan can accomplish that goal.

In addition to family changes that occur by birth or death, a change in the circumstances of a loved one may also necessitate changes in your estate plan. For example, if a beneficiary or fiduciary suffers a significant medical problem, you may need to make changes in your estate plan to accommodate that occurrence.

Significant Financial Changes

While changes in your personal circumstances — such as a marriage or birth — can be the primary motivation for updating your estate plan, significant changes in your financial situation may also necessitate revisions in your estate plan. Regardless of whether a financial change is positive or negative, you should evaluate the impact on your estate plan.

Examples of the types of financial changes that should prompt you to review your plan include acquisition or divestment of significant assets, including real estate. Similarly, changes in your business interests, whether by virtue of the purchase or sale of a business or ownership interest, likely warrant changes to your estate plan.

A significant depletion of assets, no matter how it occurs, can affect the provisions of your estate plan, because your plan addresses your own future as well as the future of your loved ones. Similarly, if your assets grow substantially, your estate plan should take your changed financial circumstances into account.

Your financial circumstances for estate planning purposes may occasionally be affected by major changes in federal law, such as those enacted in 2017 and in 2019. When you become aware of significant legislative changes at the federal or state level, it’s a good idea to check in with your estate planning lawyer to see if the changes affect your estate plan.

Major Changes in Your Life or Goals — Such As Anticipating Retirement

Any significant change in your life, or in your short-term or long-term goals, probably requires revising your estate plan. Everyone’s goals change as they grow older. Your estate planning needs and goals as a young single or married person are very different from the goals you have in your 50s, 60s, and beyond. As those goals change, your estate plan should change too.

If you move from one state to another for any reason, it’s essential to have your estate plan reviewed by an estate planning lawyer in your new state of residence. While most legal documents in your plan are likely to be valid from one state to another, having out-of-state documents can create unnecessary and costly delays in some situations. Powers of attorney and advance directives are an example of documents that should conform to the requirements of your new state, as every state has slightly different laws governing these documents. Asset protection laws also vary from state to state, which could affect your estate plan.

Anticipating retirement and providing for longer-term care needs, such as nursing home planning, are major factors that affect your estate plan. Most individuals should begin to think about these concerns and address them in their estate plan during their early 50s. Waiting to integrate these concerns and goals into your estate plan until retirement occurs or the need for care arises is not a good strategy.

The Best Approach to Keeping Your Estate Plan Current

While some lawyers recommend reviewing your estate plan every three to five years, most people will not keep that vague guideline in mind as the years go by. A better approach — and the best way to keep your estate plan current — is to review your circumstances annually at a specific time. In many years, you will only need to run through a mental checklist, to make sure there are no reasons for updating your estate plan. In other years, though, you may identify significant changes in your personal or financial situation, or in your overall goals and needs, that require you to take action to update your plan.

The beginning of every new year is a good time to undertake this task. A good alternative is reviewing your circumstances after you complete your tax return, since your finances will be in clear focus at that point. Whatever time you choose, the goal is to review your overall situation and determine whether it’s time to pick up the phone and call your estate planning lawyer.

Talk With a Georgia Estate Planning Attorney to Update Your Estate Plan

In our Cartersville estate planning practice at Asset Protection & Elder Law of Georgia, we assist clients with all aspects of creating and maintaining an estate plan. Our practice also includes matters relating to elder law, which enables us to assist with situations that arise as family members age.

We provide legal services to clients throughout the communities northwest of Atlanta, including in Bartow County, Cobb County, Cherokee County, Gordon County, Floyd County, and Paulding County. Call us at (770) 382-0984 or contact us through our online form.

Categories: Estate Planning