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When should you update your estate plan?

On Behalf of | Jan 26, 2024 | Estate Planning

Estate planning is crucial to ensuring your assets are distributed after you have passed away and is essential to creating generational wealth. You should be commended if you have taken the first steps towards securing your family’s financial future.

However, an estate plan is not something you do once and forget about. It is something that should reflect the changes that occur throughout your life.

Life’s important events

There are pivotal moments when your life undergoes a substantial change that will necessitate a review of your estate plan, including:

  • Marriage or divorce: Entering into or exiting a marital relationship will require an update of your estate plan. You may need to add your new spouse as a beneficiary for life insurance or investment accounts. Or you want to remove an ex-spouse from your will or as your power of attorney and healthcare proxy.
  • Addition to the family: The birth or adoption of a child is another crucial time to review your estate plan. You will want to ensure your child is included as a beneficiary. It’s also important to designate a guardian if something happens to you.
  • Death of a beneficiary or executor: If one of your beneficiaries or executor passes away, you must remove their names and appoint new individuals to fill their roles.
  • Moving to a different state: Estate laws can vary by state. If you move, reviewing your plan is advisable to ensure it’s still valid.
  • Significant change in assets: Coming into a large sum of money, acquiring real estate or starting a business are good reasons to revisit your estate plan. You may need to do more complex planning to minimize estate taxes.

In addition to life events, there are other times when you should look over your estate plan, such as changes in tax laws. And, even if nothing changes in your life, it’s still a good idea to review your estate plan every three to five years to ensure it still reflects your wishes.