The Importance of Updating Your Estate Plan After Major Life Events
The Greek philosopher Heraclitus is credited with the quote, “The only constant in life is change.” We experience new things every day. While some are small and seemingly insignificant, others completely redefine our lives.
At some point, you may have created an estate plan. After it was complete, you likely put it in a safe place, and that is where it’s remained.
However, you need to ask yourself: Is your estate plan still relevant in the face of your current circumstances?
Have You Experienced Significant Life Changes?
Life is made up of milestones, and your estate plan should evolve to reflect those changes. Here are some events that should trigger a review:
1. Marriage or Divorce
The beginning or ending of a marriage can impact your estate plan. As a newlywed, you will want to add your spouse as a beneficiary on any life insurance policies and investment accounts. You will also need to review your will to ensure they are included or name them as power of attorney.
If you and your spouse divorce, you will want to remove them from your will and as a beneficiary. You should take their name off of any legal documents that allow them to make any decisions on your behalf if you become incapacitated.
2. The Addition of a New Family Member
Welcoming a new child into the family is a time for joy and celebration. You will want to ensure your little one is provided for if anything should happen to you. Therefore, your estate plan needs to be updated with the appointment of a guardian and the setting up of a trust to take care of their financial needs.
3. Death
If someone listed in your will as a beneficiary or executor passes away, you must update your estate plan.
4. Financial Changes
Suppose your assets significantly increase or decrease, such as receiving an inheritance, buying or selling a business, or winning the lottery. In that case, those changes need to be reflected in your estate plan.
External Events That Impact Your Estate Plan
Even if your life remains the same, there are outside factors that may require you to update your estate plan, such as:
- Changes in tax laws
- Economic conditions
- Legal reforms
- Politics
The Consequences of an Outdated Estate Plan
If you’ve never updated your estate plan, your assets may be distributed to outdated beneficiaries, such as an ex-spouse. Loved ones that you intended to add to your policies may find themselves involved in family disputes and legal battles.
Furthermore, by failing to update your estate plan, you may have missed opportunities to take advantage of new laws or strategies that would have left more money to your heirs.
Set up Regular Reviews with LPEP Law
Unless you experience a significant life event that requires immediate changes to your estate plan, you should review it every three to five years. This ensures that your legal documents are a reflection of your current life circumstances and goals. Our attorneys at Lonich Patton Ehrlich Policastri can work with you to review the following:
- Beneficiary designations
- Guardianship
- Power of attorney and healthcare proxy
- Trusts
We will also discuss any new regulations or tax laws that may have an impact on your estate. You will have peace of mind knowing that your loved ones will be protected and provided for according to your wishes.
Contact us for a free consultation by calling (408) 553-0801.
Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.
Michael Lonich
Specializing in Divorce and Estate Planning, I am San Jose Attorney, Michael E. Lonich; and I have been battling for client’s rights for nearly 40 years. When focusing on divorce, child custody, and related matters, I know all too well the emotional and financial toll divorce has on clients. Integrity, common sense, and a passion for what I do which guarantee the best possible results for my clients. Resolution of family law issues requires an attorney able to navigate the myriad legal and emotional issues presented in cases. Financial issues, child custody, domestic violence, valuation of property, analysis of RSUs, hidden assets, spousal and child support, all may require trial, mediation, or a collaborative effort with the parties. Regardless, each client gets the individualized attention they require. Every family law case is unique, we partner with you to develop a comprehensive approach to get the best results.
