3 times people need to change estate plans (no matter their age!)

On Behalf of | Jun 24, 2024 | Estate Planning

An estate plan can give someone a sense of confidence and peace of mind as they navigate their daily life. A testator with a will and other documents on record can trust that there are protections in place for their loved ones after they die. They know that their documents will guide the legacy they leave for others.

In some cases, people may have a false sense of confidence. The documents that they drafted have since become outdated and may not properly address their needs or the vulnerabilities of their loved ones. There are a variety of circumstances in which modifying or updating an estate plan becomes necessary.

Some of those scenarios occur later in life. People preparing for retirement or learning that they have a terminal illness often decide to review and update their estate plans. There are also situations that can occur at any point in someone’s life that justify reviewing an estate plan. The following are some of the most common reasons people need to update their documents.

A change in marital status

Getting married shifts someone’s legal responsibilities and expands the group of people who depend on them. A recent marriage is reason to update an estate plan to include a spouse. On the other hand, a divorce is also a reason to adjust an estate plan. People typically want to remove their spouses as beneficiaries and take away any power they may have granted that person. Even the death of a spouse may prompt an estate plan update.

Adding new children to the family

The birth of a child is often the main motivation for the creation of an estate plan. Many parents feel strongly about providing resources for their children. They also need to address the need for guardianship if a parent dies while a child is still a minor. Grandparents, aunts, uncles and even stepparents may also want to make adjustments to estate plans to reflect the addition of new children to a family unit. A child can be very vulnerable without an appropriate plan in place to ensure their financial and day-to-day protection if a parent dies.

The acquisition or sale of major assets

If someone acquires new furniture or appliances, that may not make an estate planning update necessary. However, more significant changes may warrant major estate planning moves. Assuming ownership of a business, buying a home or selling off an investment portfolio are all examples of financial moves that make estate planning updates necessary. Effective estate plans directly address someone’s most valuable resources. Therefore, when personal holdings shift, an estate plan may need to change as well.

It is usually advisable to review and update an estate plan every few years. Major life events may necessitate making changes sooner rather than later. Recognizing when it may be time to go back over a will and similar documents can help people maximize their personal protection.