Your estate plan is a vital part of taking care of your family by ensuring that your estate is in order. It allows you to prepare for the worst so your family isn’t caught unprepared whenever you happen to pass. Yet many people don’t like working on their estate planning because it makes them depressed to think about passing on.
However, your estate plan is too important to let it just slip out of date. But that also doesn’t mean that you need to spend every waking minute worrying about it. Instead, as we’ll discuss today, you only need to worry about it following certain events. These events can be used as a trigger to remind you to update your estate planning.
But before we dig into those events, let us first address the question of whether you even need an estate plan. The answer to this may surprise some people. Once we have that in place, we’ll look at what events should trigger an update of your estate plan. Finally, we’ll discuss when you should update your will as a part of your estate plan.
Do You Even Need an Estate Plan?
For those who have already started the estate planning process, this is a pointless question. After all, you have one already so you’ve seen the benefits that come from having an estate plan. But for those who don’t, this question is incredibly important because it is our recommendation that everybody should have an estate plan.
One misconception about estate planning is that you only need to do it when you have a sizable estate. But the truth of the matter is that estate planning is useful regardless of the size of your estate. A small estate may require a far less intricate estate plan but, even so, an estate plan would still be a beneficial tool to have.
Essentially what an estate plan does is prepare for when you pass away. Issues like estate tax, inheritance, and the like are all wrapped up in your estate plan. For those with a small estate, perhaps the only feature they’ll really need from an estate plan is to create a will to enforce your wishes post-mortem. Also useful for small estates is a living will, which you use to have your medical wishes enforced when you are incapacitated and therefore can’t communicate them yourself.
Others will find that they benefit most from creating a trust and using it to secure their money for their beneficiaries. Parents will find it useful to leave instructions on guardianship designations. However, most estate plans are made up of a combination of these parts based on the unique circumstances of the individual’s estate. You may believe yours to be too small to truly benefit, only to find out that the estate planning process could offer you tools that help you to grow your estate, which in turn will require you to update your estate plan shortly down the line.
What Events Should Trigger an Update of Your Estate Plan?
There are quite a few events that should trigger you to take your estate plan and update it. But before we get to those, it is worth noting that you should also review your estate plan every so often in general. Some people recommend taking it out once every five years, others recommend taking it out and looking over it once a year. Every year or two should be enough for review.
These reviews don’t necessarily require any changes to the estate plan. They are just to double-check things and ensure that everything is still up to date and reflects your wishes in the present day. If something needs to be changed, then change it. Otherwise, a refresher is all that is needed here.
But you should update your estate plan after one of the following events:
- When you get married
- When you have been in a common law relationship for a couple years
- When you have children with a common law partner (any length of time)
- When you get divorced or separated
- When you have children
- When one of your children is diagnosed with a disability that will have a negative impact on their ability to look after themselves, live alone, or earn a living
- When you enter into a new marriage or common law relationship where you take on the role of a step parent
- When your spouse dies or is incapacitated
- When your child dies or is incapacitated
- When you have a grandchild
- When a grandchild moves in with you
- When there are tax issues or changes to the law that affect your estate plan
- When you want to change beneficiaries
- When you have worries that your child’s marriage will negatively impact inheritance and other estate issues
- When you are worried about how your will might be contested in its current form
- When a beneficiary moves out of the country
- When the executor of your estate dies
- When a guardian in your will dies, leaves the country, or otherwise becomes incapacitated
- When you purchase new properties
- When you start or purchase a new or existing business
- When you purchase other high-value assets
When Should You Update Your Will?
Your will is an important part of your estate plan. The list in the previous section includes events that you should update your will following, but there are other times when you may desire an update.
You can change your will pretty much anytime you want, so long as you pay the proper fees and go through all the right legal channels. This means that you are free to update and change it should you change your mind about anything in it. You should never feel locked into the decisions you made when you first wrote it.
Should I Work With an Estate Planning Attorney?
An estate planning attorney can help you to better understand the process and to maximize the benefits you receive from it. This could be helping you to avoid estate tax, setting up a trust to protect your child’s inheritance, or any number of other aspects of the process. Working with an attorney is easy, straightforward, and can present you with benefits you may have otherwise been unaware of.