Initially creating an estate plan is an excellent decision to plan for your future. It gives your heirs a blueprint that they can follow and instructions on how to do things like dividing your assets, splitting up a family business, dividing financial accounts and much more.
But it’s important not to assume that an estate plan will always work simply because it has been drafted. When life changes, the estate plan needs to be updated to match. Below are a few life events that can tell you that it’s time to make these updates and ensure that your plan is current again.
First and foremost, your personal relationships may change. Perhaps you were married when you made that first will, and you have since gotten divorced. Or perhaps you had already gotten divorced when you made the plan, and you’ve now gotten remarried. Regardless of the specifics, when the object of your affection changes, updates may be needed to your estate plan.
You recently moved
If you created an estate plan somewhere other than New York, it may need to be updated just because you moved to the state. Keep in mind that estate planning laws, tax regulations and other details can be vastly different from state to state. It’s important to go over your plan and make sure it will actually hold up.
You gain or lose assets
In some cases, people will intentionally sell off assets as they grow older. You may have initially put a family business or your family home into the estate plan. But if you have sold these, then you need to remove them from the plan and make adjustments to divide the earnings between your heirs.
But the same goes for a situation in which you have gained substantial assets. Perhaps your own parents passed away and left you an inheritance, maybe you started earning far more money than you were previously, maybe you benefited from a life insurance payout, or something else entirely. If you have substantially more assets now, it’s worth updating the plan so that they are included.
These are just a few examples of key life events to keep an eye on. Be sure you know exactly what legal steps to take to draft or update your estate plan.