There are two main mistakes when it comes to estate planning. One mistake is to not have at least a basic estate plan in place. The other mistake is failing to update your estate plan once you create one. It is great if you already have an estate plan, but that does not mean you have finished your work. You must review and revise your plan on a regular basis.
First, you should reassess and update your estate planning documents every few years. Second, a change in tax laws should cause you to review it as well. But there are also certain events in your life and changes in circumstances that create a reason to update your plan.
- An addition to your family
Few things are as joyful as welcoming a new child or grandchild into the world. When this happens, it is ideal to revise your documents to include these new family members. This avoids potential conflicts. You may also want to update your plan when you have a new in-law.
- Marriage or divorce
A change in your marital status should immediately create a need to revise your documents. Including your spouse or disinheriting an ex-spouse are vital choices to reflect your current wishes. Do not forget to make changes to beneficiary designations too, not just your will.
- A change in the value of your estate
Your estate may undergo a significant increase or decrease in value. If this happens, you should take another look at how you have planned your property distribution. You may decide to change your wishes in light of the changes.
- Irresponsibility or estrangement
Unfortunately, not everyone you name in your estate plan may live up to your standards. If someone becomes estranged from your family or is irresponsible with money, you may consider disinheriting this individual.
By periodically updating your plan, you and your family can be confident that your current desires are reflected.