When people make an estate plan or last will, they often think of it as a one-time project. In reality, creating a comprehensive estate plan requires ongoing attention. As a general rule, it is usually smart to revisit your last will and all other documents from your estate plan every couple of years.
However, there are certain times in your life when you should accelerate the process. After certain changes to your life or your family, immediate revisions to your last will and estate plan are often your best option.
Major changes in your family situation demand an update to your will
Families grow, shrink and change all the time. Sometimes, they get smaller because people get divorced. Other times, they get larger because you got married. Having children, losing a sibling or a parent, adopting or even realizing that a loved one has an addiction, are all situations that demand that you review your estate plan.
Correcting a last will and estate plan after a divorce or death is relatively simple. You simply remove the beneficiary, heir or trustee who is no longer alive. The same is true when your family grows. It is pretty straightforward to add somebody to your last will, whether as an executor or as an heir.
However, when you have more complicated family situations, like addiction or a child who is incredibly bad at managing money, more complex changes may be required. Creating a trust can be an option that allows you to still provide an inheritance to those who cannot manage assets on their own.
Don’t overlook your living will when updating your estate plan
For many people, the biggest issues they focus on when updating an estate plan is correcting the errors listed in the last well. They may also make changes to their life insurance policy.
Far too many people overlook updating their living will documents as well. If you name somebody who is no longer alive or who no longer holds your trust as power of attorney, you need to correct that. After all, you wouldn’t want a former spouse making life-or-death medical decisions on your behalf.
Similarly, you should review financial power of attorney documents after major life changes. You may even feel the need to make changes to your advanced medical directives in the wake of a loved one’s battle with a disease.
The important thing to remember is that your estate plan is a fluid thing. It can change and adapt to your needs as your life and your family change. It is your responsibility to make sure that it is up-to-date and accurate. Failing to make adequate changes can endanger your estate, diminish your legacy and even cause health or financial issues for you in the future.