New Year Estate Planning Checkup: Is Your Estate Plan Up to Date?

Even if you put a solid customized estate plan in place, it can turn out to be worthless for the people you love if it’s not regularly updated. Estate planning is not a one-and-done type of deal—your plan should continuously evolve along with your life circumstances and other changing conditions, such as your assets and the law. No matter who you are, your life will inevitably change – family dynamics, laws, assets, and goals. In the absence of any major life events, I recommend reviewing your estate plan annually to make sure its terms are up to date.

There are several major life events that require you to immediately update your plan if you want it to work the way it’s designed, to keep your loved ones out of court and conflict. It is my job to support you in not only creating a plan that keeps your family out of court and out of conflict in the event of your death or incapacity but will also ensure that your plan is regularly updated to make certain that it works – that it is there for your family when you cannot be. If any of the following events occur, contact me right away to amend your plan.

You Get Married
Marriage not only changes your relationship status, it changes your legal status. Regardless of whether it’s your first marriage or fourth, you must take the proper steps to ensure your estate plan properly reflects your current wishes and needs.

After tying the knot, some of your most pressing concerns include naming your new spouse as a beneficiary on your insurance policies and retirement accounts, granting him or her medical power of attorney and/or durable financial power of attorney (if that’s your wish), and adding him or her to your will and/or trust.

You Get Divorced
Since divorce can be one of the most stressful life events, estate planning often gets overshadowed by the other dramatic changes happening. Failing to update your plan for divorce can have terrible consequences.

Once divorce proceedings start, you’ll need to ensure that your future ex is no longer eligible to receive any of your assets or make financial and medical decisions on your behalf—unless that’s your wish. Once the divorce is finalized and your property is divided, you’ll need to adjust your planning to match your new asset profile and living situation.

You Give Birth or Adopt
Welcoming a new addition to your family is a joyous occasion, but it also demands new levels of planning and responsibility. At the top of your to-do list should be legally naming both long and short-term guardians for your child. Once you’ve named the guardians, consider putting estate planning vehicles in place for your children, such as a revocable living trust. These planning tools can make certain the assets you want your child to inherit will be passed on in the most effective and beneficial way possible for everyone involved.

A Loved One Dies
The death of a beloved family member, partner, or close friend can have serious consequences for both your life and estate plan. If the person was included in your plan, you need to update it accordingly to fill any gaps his or her absence creates. From naming new beneficiaries, executors, and guardians to identifying new heirs to receive assets allocated to the deceased, make sure you address all voids the death creates as soon as possible.

Outside of not creating any estate plan at all, one of the most common planning mistakes we encounter is when we get called by the loved ones of someone who has become incapacitated or died with a plan that no longer works because it has not been properly updated. Once something happens to you, it is too late to adjust your plan. The loved ones you leave behind are forced to deal with the aftermath.

You Get Seriously Ill or Injured
As with death, illness and injury are an unavoidable part of life. If you’ve been diagnosed with a serious illness or are involved in a life-changing accident, you may want to review the people you’ve chosen to handle your healthcare decisions, as well as how those decisions should be made. The person you choose as your healthcare proxy can change with time, so be sure your plan reflects your current wishes.

You Relocate to a New State
Since estate planning laws can vary widely from state to state, you’ll want to review your plan to make sure it complies with your new home’s legal requirements when you move. Some of these laws can be incredibly complex, so consult with a trusted attorney to make certain your plan will still work exactly as you desire in your new location.  I am a member of Wealth Counsel, a network of estate planning attorneys around the country and can put you in touch with an attorney within my network if you move out of state.

Your Assets or Liabilities Change Significantly
Whenever your estate’s value dramatically increases or decreases, you should revisit your estate plan to ensure it still offers the maximum protection and benefits for yourself and your loved ones. Whether you inherit a fortune, take out a new loan, close your business, or change your investment portfolio, your estate plan should be adjusted accordingly.

You Plan to Buy/Start a Business
If you are planning to buy or start a business, you’ll want to ensure your plan is updated to address your succession plan for the new business. For every business you own, you should consider creating a buy-sell agreement and/or a business succession plan to protect both your business and your family in case something happens to you. In your estate plan, you may choose to indicate who will take over your role as the company’s owner should something happen to you. You can also provide your successor with a road map for how the business should be run in your absence by creating a comprehensive business succession plan.

While this list is not exhaustive by any means, the New Year is a great time to reflect on what is in your current plan to see if any changes are necessary. Have any of the above changes happened in your life?  Have you acquired new assets that aren’t accounted for in your estate plan? Have you reviewed your estate plan lately to make sure that the plan that you want for your family is the plan that you have? If you don’t have a customized estate plan in place, please reach out to me to see what it would take to protect your family should anything happen to you. An estate planning checkup makes a great New Year’s Resolution!