There are several key moments in your life when you should consider updating your estate plan in addition to regular and routine reviews. It is beneficial for estate planners to know when those times are and when they should consider taking a second or third look at their estate plan.
Key times to update an estate plan
Regular reviews of an estate plan are always a good idea but there are also pivotal moments when an estate planner should consider updating their estate plan. These times can include the birth or adoption of a new child or grandchild. They can also include when a child or grandchild reaches adulthood or if a child or grandchild needs financial support for their education.
In addition to birth and adoption, the estate planner may also want to consider updating their estate plan if there is a death such as if the named guardian in a will for minor children dies. Other familial changes such as the addition of a dependent if you begin caring for another adult, such as an aging parent, may also lead to an estate plan review.
Both marriage and divorce should be followed by updating your estate plan. In addition, if your or your spouse’s financial goals change or your spouse experiences an illness or disability, it can lead to needed updates in your estate. Likewise, changes to life or long-term care insurance may mean you need to update your estate plan.
Significant financial changes also need to be included in an estate plan, which may include purchasing a home or other large asset, borrowing a large amount of money or taking on liability for another purpose.
- Purchasing a home or other large asset
- Borrowing a large amount of money or taking on liability for any other reason
- Assets whose value goes higher or lower, by adding investments, for example
- If you or your spouse receives a large inheritance or gift
- Changes in federal or state laws covering taxes and investments
- If any family member passes away, becomes ill, or becomes disabled
- Death or change in circumstance of your executor or trustee
- Career changes, such as a new job, promotion, or if you start or close a business
When it comes to estate planning, it can be updated every year, every 2 years, or three times a year. Estate planners recommend that you also update your estate plan after a life event occurs.