Your estate plan serves as your last line of defense when tragedy strikes. Whether a car crash leaves you in a coma or you pass away, your estate planning documents serve to convey your intentions to others and to protect your personal values.
Your estate plan may include testamentary documents for after your death and advance directives and powers of attorney that take effect in the event of some kind of medical emergency. While you may feel confident that the plan you have will adequately protect you and the people you love, there are many times when you will need to update or change your estate plan.
When you get married
A spouse has relatively strong rights regarding your shared property. Wanting to be able to provide for them and to clarify your other legacy wishes is a very good reason to update your existing estate plan to change beneficiaries and add new, shared assets.
When you divorce
Given that spouses often feature prominently in estate plans, divorce will mean that you need to revisit everything from your living trust to your insurance beneficiaries.
The birth or adoption of a child
Adding a new dependent family member is one of the happiest reasons to update your estate plan. You will want to ensure they will have adequate support if anything happens to you, which includes providing resources and naming a guardian for their care.
The death of a beneficiary or social estrangement
Sometimes, the unthinkable happens and a loved one dies long before you thought they would. Whether you lose a spouse or a child, you will need to change your estate plan to remove them from any positions of authority they may have held and to replace them with a different beneficiary for specific assets.
If you intend to remove a child or other loved one due to social estrangement, you will typically need to specify your intention to disinherit them, rather than simply removing their name from the documents. Leaving a single dollar or a Christmas ornament to them can be another successful way to disinherit them.
When your personal holdings change
If you sell your house before you move into a retirement home, you will want to rework your estate plan to remove references to your primary residence. If you take over the family business in your 40s, you may need to add that valuable asset to your succession documents.
Recognizing when it is time to make crucial changes to an existing estate plan can help you better protect yourself and others.