Putting your estate plans together probably felt like a chore when you did it. Then, if you’re like the vast majority of other people, you likely chucked all the papers in a file and forgot about them.
That’s a mistake. Estate plans are seldom static. They should be regularly reviewed and updated to account for changes in income or assets so that you’re sure that your plans will do what you intend. Estate plans also need to be updated after any of the following major life events:
You start a new business
Entrepreneurship is part of the American dream, and a lot of folks have taken the plunge by starting their own business. Before you open your doors, however, you should evaluate your estate plans and look for gaps.
Do you need new life insurance to protect your partners and your company from the consequences of your passing? Do you need a succession plan? Should you consider a trust? These are all questions that you should revisit periodically, as well.
You gain (or lose) an heir
You may celebrate the birth of a grandchild or grieve the loss of one of your own children after your estate plans are initially written – but that may require you to rethink your goals for your family.
Any change in your family structure, whether that’s through birth, death, marriage or divorce, should trigger a review of your existing estate plans.
Your relationship with one of your heirs changes
Your will reflects your feelings at the time it was written – so it needs to be updated when those feelings change.
For example, maybe you have had a falling out with your oldest child because they borrowed money and never repaid it. It may be appropriate to reduce their share of your estate by their unpaid debt. Or, maybe your youngest child has developed a gambling problem. You may want to establish a spendthrift trust to keep them from burning through your legacy.
Outdated estate plans can actually be worse than having none at all. The appropriate legal guidance can help you update your estate plans today.