If you have an estate plan in place, you already understand the importance of estate planning. Your estate plan can help protect and grow your assets over the course of your lifetime as well as ensure that your loved ones are financially secure if you pass away or become incapacitated. Having a plan in place, however, is only the beginning. Updating your estate plan is equally as important because an out-of-date estate plan can do as much damage as not having a plan. With that in mind, the Coral Gables estate planning attorneys at Stivers Law explain why estate planning is never truly finished.
Why and When to Update Your Estate Plan
You should conduct routine reviews of your estate plan at various times over the course of your life just to make sure everything is in place and that no changes are necessary. Although there are no hard and fast rules about how often to schedule a routine review of your estate plan, most estate planning attorneys recommend more frequent reviews during your working years (prior to retirement). Every five years is a good rule of thumb. Once you are firmly into your “Golden Years” you can generally stretch that out to every 8-10 years.
While routine reviews are necessary, there are also life events that should trigger an immediate update to your estate plan. Some of the more common of these life events include:
- Marriage. When you marry, you will likely want to include your new spouse in your estate plan. That may include changing the beneficiary designations on things such as your Will, retirement plans, and life insurance policies as well as changing fiduciary positions within your plan. The marriage of a child is also something that could trigger a review because your son/daughter-in-law could now stand to gain control over the inheritance you plan to leave your child.
- Divorce. One of the most common mistakes people make is forgetting to make changes to their estate plan after a divorce. Failing to update your plan after your divorce could result in an ex-spouse as the beneficiary of your estate assets.
- Birth or death of beneficiaries and/or fiduciaries. The death of anyone who is part of your estate plan, as a beneficiary or fiduciary, should prompt a review your plan because you may need to change your distribution plan or need to replace a fiduciary. The birth of a child or grandchild should also be specifically noted in your plan to ensure all your beneficiaries are properly identified.
- All your children reach the age of majority. When your children were minors, you had to protect your children’s inheritance because they could not inherit directly from your estate; however, once all your children are legal adults, you have the option to gift directly to them.
- Significant change in assets. Minor changes should already be accounted for in your plan; however, if you buy or sell a business, or other valuable assets, you may need to review your estate plan.
- Retirement. When you retire, you may start withdrawing funds from retirement accounts and selling major assets which should warrant a review of your plan. In addition, if you have not yet considered the addition of a Medicaid planning component to your estate plan, you will want to do so to ensure that you qualify if you need to down the road.
- Serious illness. Ideally, your plan is already prepared to handle your incapacity or even a terminal illness; however, if you are diagnosed with a serious illness, a review of your estate plan is always a good idea.
Contact Coral Gables Estate Planning Attorneys
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about updating your estate plan, contact the experienced Coral Gables probate attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.