Many adults believe that they never have to think about their estate plan again once it has been created, but that’s not the case. As time goes on, you may need to make a number of changes to your estate plan documents. How often should these documents be updated? Here’s what you should know:
Changes Within the Immediate Family
It’s important to ask your attorney to update your estate plan whenever a significant change has taken place within your immediate family. For example, adults who have recently gotten married or divorced will need to make sure the right people are included in their estate plans.
You will need to update your plan after having children, too. New parents should adjust their estate plan documents to ensure their children are provided for in the future. This includes providing for them financially and naming a guardian that will care for the children in the event of the parents’ deaths.
Acquisition of New Assets
An estate plan outlines what will happen to your assets after you have passed away, so these documents should be updated whenever new assets are acquired. For example, let’s say you recently purchased a classic car that is worth a pretty penny. You’ve planned for the rest of your assets to be distributed between your children, but you would like this asset to go to your nephew, who is passionate about classic cars. You will need to update your estate plan to include this information otherwise your classic car will be sold and the money distributed along with the rest of your assets.
Change to Appointed Trustee or Executor
During the estate planning process, you may need to name a trustee or executor to handle the distribution of your assets after your death. Adults often choose close friends, family members, or financial professionals as trustees or executors. But, as time passes, the appointed person could pass away, lose touch with you, or express their unease with the idea of serving as your trustee or executor. If this happens, it’s important to appoint another person and update your estate documents to reflect this change.
New Tax Laws
Lawmakers often make changes to the existing state and federal tax laws. It’s in your best interest to pay attention to these changes so you can determine whether or not they affect your estate plan. For example, the Tax Cuts and Job Act that was signed last year increased the estate tax exemption amount, which eliminated the estate tax for many wealthy adults. This means certain wealthy adults may need to simplify their estate plans to account for this change. Stay on top of these changes so you can improve your estate plan whenever there is an opportunity to do so.
Conduct Regular Reviews
It’s possible that no major changes will impact your life after your estate plan has been created. In this case, it’s still wise to conduct a thorough review of your estate plan documents once every three to five years. Use these reviews as opportunities to look for things you may have missed in the past so you can ensure you are completely satisfied with every aspect of your estate plan.
If you’re ready to start the estate planning process, seek legal representation from our experienced attorneys. We help clients create thorough estate plans and work with them through the years to ensure they are regularly updated. Contact The Nice Law Firm at 317-269-3500 to schedule a consultation regarding your needs.