Why Your Estate Plan Should Evolve as Your Family and Finances Grow
Estate planning is a critical process that makes sure your assets are distributed according to your wishes, your loved ones are protected, and your financial legacy is preserved. In Indiana, as in other states, estate planning isn’t a one-time task but a dynamic process that must adapt to changes in your family structure, financial situation, and legal environment.
As your life evolves—through marriage, the birth of children, career advancements, or significant financial growth—your estate plan must evolve to reflect these changes.
Our attorneys at The Nice Law Firm in Indianapolis, Indiana, can explain why and how your estate plan should adapt to your growing family and finances in Indiana. Below are key considerations and practical steps to make sure your estate plan remains effective.
The Importance of Estate Planning in Indiana
Estate planning involves creating legal documents and strategies to manage and distribute your assets during your lifetime and after your death. In Indiana, an estate plan typically includes a will, trusts, powers of attorney, healthcare directives, and beneficiary designations.
These tools help you control how your property is distributed, minimize taxes, avoid probate, and confirm your healthcare and financial decisions align with your wishes if you become incapacitated.
Without a proper estate plan, Indiana’s intestacy laws will dictate how your assets are distributed if you pass away without a will. These laws follow a predetermined hierarchy, prioritizing spouses, children, and other relatives, which may not align with your preferences.
For example, if you’re unmarried but have a long-term partner, they may receive nothing under intestacy laws. Additionally, without a plan, your estate may go through probate, a public and often lengthy process in Indiana that can be costly and stressful for your family.
As your family and finances grow, the complexity of your estate plan increases. Major life events, such as marriage, divorce, the birth of children or grandchildren, or significant financial windfalls, can render an outdated plan ineffective. Regularly updating your estate plan verifies that it reflects your current circumstances and goals.
Life Changes That Necessitate Estate Plan Updates
Here are some life changes that necessitate estate plan updates:
Marriage or Domestic Partnership
When you marry or enter a domestic partnership, your estate plan must account for your new partner. In Indiana, a surviving spouse is entitled to a portion of your estate under intestacy laws, but you may want to specify how much they receive or how assets are divided between your spouse and other heirs, such as children from a previous relationship.
For example, you might create a trust to provide for your spouse during their lifetime while making sure your children inherit the remaining assets.
If you marry after creating a will, Indiana law automatically grants your spouse certain inheritance rights unless the will explicitly excludes them. However, relying on default laws can lead to unintended consequences, especially in blended families. Updating your will or creating a prenuptial agreement can clarify your intentions and prevent disputes.
Birth or Adoption of Children
The arrival of a child is one of the most significant reasons to update your estate plan. You’ll need to designate guardians to care for minor children if both parents pass away. In Indiana, without a named guardian in your will, the court will decide who raises your children, which may not align with your preferences.
Additionally, you may want to establish a trust to manage assets for your children until they reach a certain age, confirming they’re financially secure without receiving a large sum prematurely.
For example, a testamentary trust can be set up in your will to distribute funds for your child’s education, healthcare, or living expenses. You can appoint a trusted trustee to manage these funds, confirming they’re used responsibly. As your family grows, you may need to adjust the trust’s terms to account for additional children or changing financial needs.
Divorce or Remarriage
Divorce or remarriage significantly impacts your estate plan. In Indiana, a divorce automatically revokes provisions in your will that favor your former spouse, but other documents, such as beneficiary designations on life insurance or retirement accounts, aren’t automatically updated.
Failing to revise these designations could result in your ex-spouse receiving assets you intended for someone else.
Remarriage introduces additional intricacies, especially in blended families. You may need to balance providing for your new spouse with confirming that your children from a previous marriage are included in your estate plan.
A qualified terminable interest property (QTIP) trust, for instance, can provide income to your spouse during their lifetime while preserving the principal for your children.
Financial Growth or New Assets
As your financial situation evolves—through career advancements, business ownership, or investments—your estate plan must reflect these changes. Acquiring new assets, such as real estate, stocks, or a business, requires updating your plan to confirm proper management and distribution.
In Indiana, significant wealth may also trigger federal estate tax considerations, although the federal exemption is high ($13.61 million per individual in 2025). Indiana repealed its state inheritance tax in 2013, but federal taxes and other fees, such as probate costs, can still impact your estate.
For example, if you start a business, you may need a buy-sell agreement or a succession plan to make sure of a smooth transition after your death. If you acquire real estate, you might consider placing it in a trust to avoid probate, which in Indiana can be time-consuming and expensive, especially for estates with significant assets.
Aging or Health Changes
As you or your beneficiaries age, health-related concerns become more prominent. Updating your estate plan to include or revise healthcare directives, such as a living will or healthcare power of attorney, makes sure your medical wishes are followed if you become incapacitated.
In Indiana, a living will specifies your preferences for life-sustaining treatment, while a healthcare power of attorney appoints someone to make medical decisions on your behalf.
Additionally, if a beneficiary develops special needs, you may need to create a special needs trust to provide for them without jeopardizing their eligibility for government benefits like Medicaid. These trusts are particularly relevant in Indiana, where Medicaid eligibility rules are strict.
Changes in Family Dynamics
Family dynamics can shift due to estrangement, reconciliation, or the death of a beneficiary or executor. If a named beneficiary or executor passes away, you’ll need to update your plan to designate new individuals.
Similarly, if a child or grandchild faces financial difficulties, such as bankruptcy or creditor issues, you might consider protective measures like a discretionary trust to shield assets from creditors.
Legal Considerations in Indiana
Here are some legal considerations to be aware of:
Probate and Non-Probate Assets
In Indiana, probate is the court-supervised process of validating a will and distributing assets. Probate can be costly (with fees for attorneys, executors, and court filings) and public, exposing your estate to scrutiny.
To avoid probate, you can use tools like revocable living trusts, beneficiary designations, or joint ownership with rights of survivorship. As your assets grow, transferring them to a trust can streamline distribution and maintain privacy.
Non-probate assets, such as life insurance policies, retirement accounts, and payable-on-death accounts, pass directly to beneficiaries. However, these designations must be updated regularly to reflect your current wishes, especially after major life events.
Indiana’s Elective Share
Indiana law allows a surviving spouse to claim an “elective share” of up to one-half of the estate if they are excluded from or receive less under the will. This right confirms spouses aren’t disinherited, but it can complicate estate plans in blended families.
Updating your plan to account for this provision—perhaps through a trust or prenuptial agreement—can prevent disputes.
Trusts for Flexibility and Control
Trusts are powerful tools in Indiana estate planning, offering flexibility and control. A revocable living trust allows you to manage assets during your lifetime and avoid probate upon death. An irrevocable trust can protect assets from creditors or reduce estate taxes.
As your finances grow, you may need multiple trusts to address specific goals, such as providing for minor children, supporting a charity, or protecting a family business.
Guardianship and Conservatorship
For minor children or incapacitated adults, Indiana courts appoint guardians or conservators to manage their care and finances. Naming a guardian in your will avoids court intervention and makes sure your children are raised by someone you trust.
Similarly, a financial power of attorney designates someone to manage your finances if you’re unable to do so, preventing the need for a court-appointed conservator.
Contact an Estate Planning Attorney
An estate plan is a living document that must evolve as your family and finances grow. In Indiana, where state laws like intestacy rules and elective shares can impact your estate, regular updates make sure your plan reflects your current wishes and circumstances. Don’t wait; contact us at The Nice Law Firm in Indianapolis, Indiana, today. We serve residents in Indianapolis, Scottsburg, Terre Haute, Kokoma, Martinsville, Lebanon, and Greensburg, Indiana.
