5 events that should prompt you to update your estate plan
Having a will in place is not enough; you should be reviewing it periodically to make sure it is up to date.
If you have a will in place, you are already ahead of the game. According to a report from the American Association of Retired Persons, only about four in 10 adults in America have established either a will or a living trust. That means a significant amount of people in Florida do not have a plan for what happens to their legacy.
However, simply putting together a legal document is not enough. That plan should be updated when certain life events happen. Here are five events that should prompt you to review your decisions:
1. Birth or death
While a birth is something to celebrate and a death is something to mourn, these events in a family should eventually lead to a review of a will or trust. A birth could signify the need to add a beneficiary, and a death could mean that assets would need to be reallocated.
2. Wedding or divorce
Similar to the above point, a wedding or divorce marks someone either coming into or possibly leaving a family. This is true whether it is your own personal wedding or divorce, or perhaps it is happening to your child. The union or separation could merit a quick update to your estate plan.
3. Significant gain or loss
As we go through life, we experience all its ups and downs. Stock portfolios and real property go through ups and downs as well. If there is a significant gain – such as buying real estate – or a major loss, an estate plan must be updated. Consider, if nothing else, that an estate plan often distributes property and assets among heirs. It could be that you are leaving cash to one child and property to another. If there is a change in either of those areas, it could create an imbalance that would seem unfair and cause turmoil in the family.
4. A move
Moving into another state often means that the laws governing your state plan have changed. In fact, what constitutes a legal will even differs from state to state. It is always a good idea to review estate planning laws – even if you have not moved – just to be sure that your plan is still intact.
5. Periodic review
If no major events happen, even just time passing should trigger a review of your plan. Experts recommend taking a look at it every few years to be sure that nothing has fallen through the cracks. Also, as you get closer to retirement age, it may be necessary to discuss options in terms of what to do with a 401(k) or other account to ensure it still falls in line with your wishes.
Anyone who has questions about this topic should speak with an estate planning attorney.