When does your will and estate plan need to be updated?

Having a will and an estate plan in place is an important step for securing a legacy for your loved ones. But as time goes by many life events can make your plan outdated. As noted in Forbes, the following are examples of common reasons to update your will and estate planning documents.

Changes in your marital status

Changes in your marital status, such as marriage or divorce, can impact your estate plan. Individuals who have recently married will in most cases want to add their new spouse to their will and other estate planning documents. Certain tax advantages are available through proper planning, such as the unlimited marital deduction, a provision that allows spouses to transfer an unrestricted amount of assets between themselves at any time, whether during their lifetimes or at the death of the transferor, without incurring federal estate or gift tax liability.

Individuals who have recently divorced will likely want to have their former spouse removed as a fiduciary and a beneficiary under the will and other estate planning documents, including life insurance policies, IRAs, 401(k)s and other retirement plans.

Changes in your personal representatives

Estate plan documents generally provide for substitute personal representatives (such as an alternate executor, trustee, guardian, or agent designated under a power of attorney), but changes may be needed due to the death or incapacitation of the person named or perhaps the remarriage or divorce of a married couple named as co-fiduciaries.

Relocation may also make the personal representative no longer a suitable to serve for logistical reasons, or possibly even render them ineligible to serve, as some states place restrictions on out-of-state personal representatives.

Also, if children were minors when the estate plan was initially set, adding one or more children as personal representatives, or as alternates, may be desirable once they have reached adulthood.

Changes in your beneficiaries

Changes such as the birth, death, adoption, marriage or divorce of a beneficiary, or children reaching the age of 18, can affect your estate plan.

Changes in your distribution plan

There may be changed circumstances affecting your wishes regarding distribution of your property, including:

  • Beneficiaries with special needs due to physical or mental disability
  • Planning for long term care or nursing home care
  • Trust provisions for safeguarding property gifts, loans or lifetime distributions to a beneficiary
  • Disinheritance of a beneficiary

Changes in your legal residence

If you relocate or change your legal residence to another state, your will and estate plan should be reviewed by an attorney. Probate and estate planning laws generally differ from state to state.

Changes in your estate assets

Tax planning strategies can be affected by significant changes in the value of estate assets. The purchase or sale of a business, acquisition of property in more than one state, or the purchase of life insurance can also impact your estate plan. Updates may be needed due to changes to specific assets, for example, where a specially designated asset has subsequently been sold, leased or mortgaged, or has been lost or destroyed, or perhaps already given to the person by means of a lifetime distribution.

Changes in the law

Estate planning can be a complex process and state and federal laws affecting estate planning are subject to frequent changes. Individuals desiring assistance in these matters should consult with an experienced estate planning attorney who stays current in this field in order to ensure that it is done correctly.