Estate planning helps ensure your assets are distributed according to your wishes. Therefore, just creating an estate plan isn’t enough. Your life and the lives of your loved ones will go through many changes over time, and it is crucial to update your estate plan to reflect those changes.
Your life and the lives of your loved ones will go through many changes over time, and it is crucial to update your estate plan to reflect those changes. This article will discuss the 3 instances when you have to update your estate plan.
When your marital status changes
Marriage is a significant life event that should be reflected in your estate plan. Therefore, when you get married, you should review and update your estate plan to ensure your spouse is included. For example, you may want to add your spouse as a beneficiary to your assets or change your power of attorney.
Similarly, if you get divorced, it is crucial to update your estate plan to remove your ex-spouse’s name as a beneficiary and, if necessary, change the power of attorney. Failure to update your estate plan can lead to unwanted consequences, such as your assets being distributed to your ex-spouse or your ex-spouse making medical or financial decisions for you in case you become incapacitated.
When your financial situation changes
Another important reason to update your estate plan is a significant change in your financial situation. For instance, if you come into a large sum of money or acquire new assets, you may need to revise your estate plan to reflect these changes. For example, you may want to create a trust to protect your assets.
On the other hand, if you experience a decline in your financial situation, you may need to adjust your estate plan to reflect these changes. You may need to review your beneficiaries and adjust your estate plan accordingly.
When your health status changes
Your health status can also affect your estate plan. If you are diagnosed with a serious illness, you may need to update your estate plan to ensure that your medical and financial decisions are made according to your wishes. You may want to appoint a trusted family member or friend to make medical decisions for you or create a trust to protect your assets in case you become incapacitated.
Updating your estate plan is crucial to avoid unwanted consequences. Changes in your marital status, financial situation and health status are some of the key reasons to update your estate plan.