The Importance of Updating your Estate Plan Following Major Life Events

Estate planning is a lifelong and dynamic process. It is not something you do once and forget about. From the time you first establish your estate plan to the time it is actually put into effect, you are likely to go through many different phases in your life. As your personal circumstances and family relationships change over time, any changes in how you want your property to be distributed must be accurately reflected in your estate plan. For example, if you are newly divorced or have just had a baby, it is important to revisit your estate plan as soon as possible after the event. Making sure that the right people are included in all of your estate planning documents and that your current intentions are clearly expressed will give you peace of mind and ensure that your wishes are carried out after you die.

There are many life events that can give rise to the need to update — or establish, if you don’t already have one — your estate plan. An experienced estate planner can assist you in updating all of your estate planning documents following a major life event, including wills, trusts, powers of attorney, and healthcare proxies.

When to Update Your Estate Plan

Importantly, you should revisit your estate plan as soon as possible after any of the following major life events:

• Marriage
• Divorce
• Birth of a child
• Death of a child
• Death of a family member
• Adopting a child
• Loss of a job
• New or growing business endeavors
• Significant change in personal wealth
• Receiving a substantial gift or inheritance
• Moving to another state, or acquisition of a secondary residence in another state

If your estate plan is three or more years old, you should consider reviewing it, even if you have not recently experienced a major life event. In addition, if there has been a change in the laws that govern your estate (whether state or federal and especially with regard to the tax code), you should consult with an estate planner. An experienced estate planning attorney can keep you informed if there is a change in law that may impact your estate plan.

How to Update Your Estate Plan

As you revisit your estate plan, you want to ask yourself certain questions, including:

• Are the right people included and named?
• Are all major changes reflected, such as the deletion of your ex-spouse or a family member who has died?
• Are my intentions still the same?
• Is there anyone I want to disinherit (perhaps because he or she has been irresponsible with money or is estranged from the family)?

Your estate plan may be comprehensive and include numerous documents. You may have one or more of the following: last will and testament; living will; financial power of attorney; living trust; and advance directive. When you are revising your estate plan following a major life event, you want to be sure that any changes or updates are made across the board. In addition, you should also update the beneficiaries on any life insurance policies, retirement plans, or business plans if you own a business.

If you are revisiting your estate plan following a major life event, your estate planner can also confirm that your documents comply with the latest legal requirements in your state, and that you are taking full advantage of the relevant provisions of the tax code in its current form. If you are relocating to another state, it is important to revisit your estate plan as each state has its own estate laws, and you want to be sure that all of your documents are legally binding under the laws of your new home state.

Update Your Estate Plan As Soon as Possible After a Major Life Event

It is also important that you revisit your estate plan as soon as possible after the occurrence of a major life event. If you die before you have a chance to update your estate plan documents, you risk having your assets distributed in a way that does not reflect your current wishes. For example, if you get a divorce and pass away before your will is updated, your ex-spouse may be entitled to some of your assets. This is why it is crucial to update your plan as soon as a major life event happens, rather than waiting to revisit your plan every three to five years.

How We Can Help

If you need assistance establishing or updating your estate plan, we welcome you to contact Litowich Law. Based in Salem, we serve clients throughout Oregon and are dedicated to helping you plan for your family’s future.