If you already have an estate plan, then kudos to you. Most Americans don’t have one. But, an estate plan is not something you can do one time and forget about it. It needs to be reviewed and updated to reflect your current life circumstances to be effective.
Here are times you should consider updating your estate plan.
Marriage or divorce
Both of these events will impact the way you want your assets distributed. Furthermore, many married couples name their partner as power of attorney, executor and beneficiary. You will want to remove that person if you divorce.
Birth or adoption of a child
When you welcome a new child into your family, you want to ensure they will be financially secure if you die or become incapacitated. This may involve naming them as beneficiaries or setting up a trust to provide for them if they are minors.
Death of a beneficiary or executor
If someone named in your current estate plan dies, you will need to remove them and designate another person, if necessary.
Significant change in assets
A major change in your financial situation is another reason to review your estate plan. If you acquire real estate, you will want to include it in your plan. If you start or own a business, you should also create a succession plan.
Changes in state and federal laws
Any change in estate law will impact your estate plan. Reviewing and updating your plan may help reduce the tax burden on your heirs.
In addition to the items mentioned above, reviewing your estate plan every three to five years is a good idea. This allows you to ensure that your plan still reflects your current wishes and that all the information it contains is accurate.