Need an estate-plan check-up? There is no time like the present. Review this list of life milestones that may mean you should revisit your current plan.
The first of the year is a perfect time to plan for the year; review your finances, taxes, and retirement accounts and plans; and check your estate plan. And if you don’t have an estate plan, it’s a good time to put your affairs in order by preparing an estate plan.
Your annual estate planning checkup should evaluate whether your estate plan reflects your current life and financial circumstances and your desires upon death. An estate plan should be changed to reflect your current circumstances. As you get married or divorced, have children or grandchildren or as family members become incapacitated or pass away, your estate plan should be updated.
Events that may trigger an update to your estate plan:
- Second Marriage
- Unmarried couples
- Divorce or change in relationship
- Birth or adoption of child
- Children become adults
- Serious or chronic illness
- Move to a different state
- Inherit wealth
- Purchase or sale of real estate
- Change in estate tax laws
- Is the ownership of your assets coordinated with your estate plan?
For example, if you have recently purchased a home or other real property, is the title consistent with your estate plan (in the name of your estate planning trust or joint tenancy with your spouse or partner)? Do you need to update beneficiary designations for your life insurance policy or retirement plans?
- Do you want to change the guardians for your minor children?
- Do you want to change the trustees, personal representatives or executors named to make financial and health decisions and to settle your estate? For example if a bank is named as your executor, does the bank still exist?
- Do you have marriage plans? If you are planning a second marriage, do you have children from your first marriage? You may want to consider having a pre-nuptial agreement and making your estate plan consistent with the pre-nuptial agreement.
- Is anyone in your family experiencing serious health problems which may affect their mental or physical abilities?
- Are your power of attorney, living will and health directive documents current?
Any time there is a significant change in your life, you should take a fresh look at your estate plan to determine if changes are necessary. Even without significant life changes, you should review your estate plan every 3 to 5 years.
You may also want to consider whether your parents or other close loved ones have appropriate estate plans. For example, if your parent has early to mid stage dementia, you should make certain that estate planning documents are in place to give authority to other family members to make financial and health decisions in the event your parent becomes incapacitated.