You have worked hard to develop a comprehensive estate plan consisting of several documents and countless contingencies to ensure your surviving loved ones are properly cared for and your end of life decisions are honored. Unfortunately, you are not finished. An estate plan is a flexible series of documents that must be revised based on the changing circumstances of your life.
Many financial experts suggest that an estate plan should be reviewed and revised every three to five years, but there are significant life events that should lead to an immediate revision, including:
- Marriage or divorce: Either of these events can represent a dramatic change to your lifestyle. It is important that you immediately revise your estate planning documents to either add the name of your new spouse or remove your ex. This can also include changing beneficiaries in your retirement account and life insurance policy.
- New children: Whether it is the birth of a child, an adoption or a stepchild through marriage, it is wise to ensure your will reflects this new individual. Additionally, you might consider writing a trust to ensure your minor child is financially secure in the event of your passing.
- Changing relationships: Relationships grow and fade over the course of your lifetime. Someone you might have identified as a financial proxy or guardian could very well see their circumstances change. Whether they are struggling with job loss, relocation thousands of miles away or your friendship has simply faded, it is wise to ensure your estate plan includes individuals you deem capable of performing their duties.
- Deceased heirs: It is not uncommon for individuals to pass away after being named in your will. If you didn’t include primary and secondary heirs in the estate plan, it is wise to revise the documents.
In addition to these life events, you should consider revising your estate plan when you purchase a home, start a business or see a dramatic change in asset valuation. Likewise, revisions might be necessary if state or federal laws change that could affect investments or tax implications.