Major Life Events That Require an Estate Plan Update
When you experience a significant change in your life, certain aspects of your estate plan may need to be updated or completely revised to align with the new normal. If any of these major life events listed below have occurred, it might be a good time to update your estate plan. Life changes, so should your estate plan.
My recommendation is to look at your plan every five or so years, or when you have a big life change, such as birth of a new child, death of a family member.
Family Changes
How to Avoid
Review your estate plan regularly, especially when you experience a significant life change that affects your family. Whether it’s to plan for a new family member or reflect another’s passing, it’s important to adjust for changes to guardianship, beneficiaries, and other family dynamics in your documents. Consider updating your life plan after any of the following:
- Birth of a child
- Birth of a grandchild
- Adoption
- Marriage
- Engagement
- Divorce
- Death of a loved one
- Diagnosis of an illness
- Inheritance or recent change in employment
Health Changes
Your estate plan likely reflects your state of health at the time of its drafting. However, if you’re diagnosed with a significant medical condition or a beneficiary’s care requirements change, you should update your plan to account for your family’s needs. Examples of major health events include:
- Health issues
- Illness
- Disability
- Change in life expectancy
- Aging parents
- Admission into a nursing home
- Loved one with special needs
- Change in health care agents
Financial Changes
How your assets are distributed after your passing is a key aspect of estate planning. Major shifts in your finances or wealth necessitate adjustments to your plans to ensure your beneficiaries receive what you intend them to. Changes that should prompt an estate plan update include:
- New assets
- New bank accounts
- New retirement accounts
- Recent inheritance
- Life insurance changes
- New life insurance policies
- Bankruptcy
As your financial situation evolves, so should your estate plan. Regularly reviewing your assets ensures that your loved ones receive what you intend—without confusion or unintended tax consequences.
Property Changes
Real estate and other properties are often a large percentage of an individual’s assets and are very important to estate planning. You should always update your estate plan after purchasing or selling certain properties, including:
- Purchase of a new home
- Purchase of a new vacation home
- Purchase of a rental property
- Sale of a family residential home or rental property
- Foreclosures
- Mortgage changes, such as taking out a home equity loan
Business and Career Changes
A significant career change can have a major impact on your finances and assets. Similarly, when starting, ending, or modifying your ownership in a business, it is essential to update your estate plan to ensure that the business’s succession and asset distribution align with your wishes. Business and employment-related shifts to consider include the following:
- Buying a business
- Selling a business
- New business partners
- Retirement
- Taking a new job
- A lucrative promotion or raise
- Layoffs or significant reductions in income
What Our Experts Say About Updating Your Estate Plan
These insights come directly from our experienced attorneys, who emphasize the importance of keeping your estate plan up to date and aligned with your current stage of life.
Remember to place newly acquired assets in your trust to keep your estate plan complete and avoid probate.
Conduct a yearly review of your estate plan to ensure your beneficiary designations align with your current intentions.
Your estate plan can be thought of like a vehicle – routine maintenance is encouraged!
Make sure your documents reflect your current stage of life – review them every 3-5 years or when big life events occur.
Review your current plan every 2-5 years or when a major life event occurs.
A good rule of thumb is to review your estate planning documents every 3-5 years for updates.
Should You Update Your Estate Plan After Moving to Another State?
Yes, always update your estate plan after moving to a new state. There are often significant differences in state laws governing probate, estate taxes, powers of attorney, health care directives, and many other aspects of estate planning.
After a move, it’s important to ensure the following facets of your estate plan are in line with state laws:
- Your last will and testament
- Financial power of attorney
- Healthcare power of attorney
- HIPAA authorization
“If you have a plan that hasn’t been updated, there’s a very likelihood that it is not going to meet your wishes and there’s going to be unintended consequences.”
How to Update Your Estate Plan
Once you’ve determined that you need to make changes to your estate plan, it’s time to take action. Steps to update your estate plan include:
- Review your existing documents. Note any aspects of your estate plan that might be impacted by recent life changes.
- Consult with an experienced estate planning attorney. Your attorney can help you identify what parts of your estate plan need to be updated and make changes that help accomplish your goals.
- Check your beneficiaries. Review your will and trust to determine if they need to be updated to reflect significant life events and their impact on your loved ones.
- Review powers of attorney. If your relationships with any family members have recently changed, make sure you’re designating power of attorney to those you trust to faithfully carry out your wishes.
- Notify affected individuals. If you make major updates to your estate plan, inform your beneficiaries, the executor of your will, your agent designated in a power of attorney, and others impacted.
- Make the changes official. Your attorney can help you with executing your will and other documents, as well as making copies and backups.
Ready to Update Your Estate Plan?
You’ve planned your estate to ensure your loved ones are taken care of and your family’s legacy is preserved. However, circumstances change. Therefore, you should review your estate plan regularly to account for any changes and ensure it works as intended.
The experienced estate planning attorneys with Evans & Davis have helped over 30,000 clients like you achieve peace of mind and protect their futures. Our team anticipates client needs, provides innovative solutions, and builds lifelong relationships rooted in trust and care.
Testimonials from satisfied clients, like the following, attest to our skills and commitment:
Evans & Davis, PLLC is an exceptional group of attorneys and a helpful support staff. For many years I’ve referred my estate planning clients to this firm and all who chose to employ this firm have been pleased. Recently my wife and I had Evans & Davis attorney, Mitch McCuistian, update our Revocable Trust, wills and all the supporting legal documents that are needed to assure care and financial well-being to ourselves for as long as we live and to assure our family a worry-free transfer of our assets at our deaths. I highly recommend Evans & Davis firm for your estate planning legal work.
We have had all of our estate plans done through Evans and Davis twice now—the first time as a full-blown plan and the second as an update. Both times, we knew we were in great hands. They asked questions we would have never thought of and made sure we covered everything that could possibly happen. All of the attorneys and staff are top-notch and super professional. We have already recommended them a ton to friends and will continue to do so. They’re the best!
To update your estate plan, contact us online today to learn more about how our compassionate legal team can help you.
