Preparing an estate plan is not a one-time event but the beginning of a ritual that you should carry out on a regular basis. From the time you plan your estate till the day you die, only one thing remains constant: change. Your circumstances will inevitably change over a period of time, making the previous plan out of date.
In fact, there are several reasons you might want to update your plan:
- Your marital status has changed. You have either married since the time you last made an estate plan or you have gotten a divorce. Prior to marriage, you may have willed your property to your parents or friends. However, after marriage, you may want your spouse to have rights to most of your assets. Again, when you divorce, you may want to change your Will to remove your spouse from the list of people who will inherit your wealth. If you have remarried and there are kids from an earlier marriage, you may want to provide for them in your Will.
- You become a parent. When your child is born, you may want to add him/her to your Will. You may also want to appoint a guardian for your child in the event of your untimely demise. If you fail to do so, the state will appoint a guardian on your behalf. This is something you would definitely not want, since the guardian appointed by the state may not be the person you would have selected for your child.
- Your wealth has increased in value: When you are young, you have fewer assets to plan for. However, the value and extent of your assets might have appreciated, making your whole estate plan redundant.
- You have moved to another state. Although your estate plan may still hold good, your new residence may have different laws. You would need to meet a lawyer who could help in ensuring that your estate plan holds good in the new place of residence.
- Death of a beneficiary. When a beneficiary mentioned in your plan dies, you must update your Will to remove the person’s name. If you fail to do so, your Personal Representative or Successor Trustee may unnecessarily spend time tracking the person, delaying the distribution of assets.