5 Life Events That Mean It’s Time to Review Your Estate Plan
The phrase “the only constant is change” is commonly attributed to ancient Greek philosopher Heraclitus, and while he may have lived hundreds of years ago, there’s truth to it. And it’s true in all parts of your life. Take estate planning for example. A common misconception many people have is that creating a Will or a Trust is a set-it-and-forget-it event. This misconception is perpetuated by how traditional estate planning attorneys provide their services. You meet with a lawyer, she drafts you some form documents which you probably don’t understand, you get home, you put them on a shelf and never look at them again. Since no one ever follows up with you, you believe you don’t need any updates. But the reality is, you do. As a rule of thumb, you should review your plan every three to five years. That’s why I offer complimentary reviews for my estate planning clients every three years.
However, for your estate plan to be effective when it’s needed, it must reflect your life and your wishes at that time. That’s why if any of these events happen to you, you need to update your estate plan as soon as possible.
1. The Birth or Adoption of a Child
The addition of a member of the family is a joyous occasion! With all the new responsibilities of parenthood, don’t forget to add updating your estate plan into the mix. The most important task is naming Guardians for your new kids. These are the people who would in step in should something happen to you. You may also want to consider setting up a Trust as part of a financial plan to start preparing for their educational expenses in the future.
2. Starting, Selling or Buying a Business
Entrepreneurship is for few and far between. Everything is different when you work for yourself, and estate planning is no different. Whether you’re just starting out or preparing for your exit, you should update your estate plan to specify what should happen to your business should you pass away. Creating a plan to facilitate a smooth transition of ownership and protect your business assets for yourself and your family’s future. A well-structured plan can help preserve the value of your business for future generations.
3. Changes in Your Assets & Liabilities
As you go through life your assets and liabilities will change. Some of these will be significant, like buying a new homestead, selling real estate, or taking on liabilities like a mortgage or other loan. If have insurance policies or open a brokerage or retirement accounts, you’ll need to review and update the beneficiary designations. To make sure everything is up to date, and nothing is lost to the Florida Division of Unclaimed Property should something happen to you, you need an Asset Inventory, listing what you own so your family knows what there is, where it is, and how to find it.
4. Your Child Has Reached the Age of Majority
They’ll always be your baby, but soon they’ll be an adult (in the eyes of the law.) So, it’s time to talk about who is going to make healthcare decisions for them, manage their money if they become incapacitated, and how they will review their inheritance. If you’d like to protect your child’s inheritance from future lawsuits or divorces, they may face later in life, consider putting their inheritance in a Lifetime Asset Protection Trust.
5. The Death of a Loved One
The loss of a loved one is an incredibly difficult moment. What’s worse, aside from the emotional pain, their passing could create additional concerns. If your deceased loved one was a beneficiary under your estate plan, you’ll need to update your documents to account for their share. If your deceased loved one held a role within your estate plan, like Personal Representative, Successor Trustee, or Agent, you need to update your plan to replace your deceased loved ones in those roles.
TealAcre: Guiding You Through Life's Big Moments
Your estate plan is a snapshot in your life. It’s a reflection of your relationships and assets in a moment in time. Accordingly, it should change as your life changes. That’s why regular reviews are essential to ensure that it continues to meet your needs and intentions. At TealAcre, we are committed to guiding you through life’s transitions to keep your estate plan current and effective.
If you've recently experienced any significant life events or it’s been longer than three years since you last reviewed your plan, it may be time to take a look. To contact us you can:
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