Having an estate plan is important, but it’s equally important to ensure that it’s up to date. Far too many people draft a plan, forget about it, and then let it sit for years or even decades. When they pass away, their family finds that it does not even address their current situation and provides very little help.
To combat this, you can do one of two things. First, you can consider life events that mean it’s time to update the plan. When they occur, you simply make the updates as soon as possible. Second, you can update your plan on an annual basis. Both tactics have advantages and drawbacks, but anything is better than neglecting the plan entirely.
Examples of reasons you may need to update your plan soon
If you’re not sure if your plan is up to date or not, but you want to fix it if needed, consider the following examples of potential reasons to take another look at your estate plan:
- Your assets have changed. Perhaps you owned a business and sold it. Maybe you got an inheritance from your parents, significantly increasing your wealth.
- Your family has changed. Perhaps you got divorced, and you need to take your ex out of the plan. Maybe you got married and your new spouse isn’t mentioned. You do not want outdated beneficiaries.
- You had a new child or a grandchild. Your plan was complete before, but now it doesn’t include this new addition to your family. Similarly, you may need to update the plan if an heir got married and you want to include their spouse — though you don’t have to do so.
- You acquired new physical assets. You may need to instruct your heirs on what to do with them since they cannot just divide those assets between themselves.
Updating your plan likely isn’t as difficult as you may assume, and it can usually be done quickly. Even so, the benefits to your family are tremendous, helping to guide them and prevent disputes. Make sure you are well aware of the steps you need to take to ensure you always have the right plan in place.