Estate plans are essential in protecting your assets and ensuring your wishes are honored. However, life doesn’t stand still, and when major events occur, it’s crucial to revisit and update your estate plan.
Below are six common life changes that should prompt a review of your estate plan, as well as tips for making sure it reflects your current needs.
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Marriage
Getting married is a significant life event that can drastically alter your estate planning needs. When you marry, it’s vital to update your estate plan to include your spouse as a beneficiary, assign them power of attorney, and review any existing trusts. Failure to do so could mean that outdated provisions could take precedence.
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Divorce
If you’ve gone through a divorce, it’s just as important to revisit your estate plan. Many people forget to remove their ex-spouse as a beneficiary or power of attorney, which can create complications. After a divorce, make sure to update your will, change beneficiaries on insurance policies and retirement accounts, and revise any shared property arrangements.
- Birth of a Grandchild
Welcoming a new grandchild is a joyful event, and it’s a good time to consider including them in your estate plan. You might want to set up a trust for their future or designate funds specifically for their education. Adjusting your estate plan to reflect these new family dynamics ensures that your wishes for future generations are clear.
- Sale of a Major Asset
The sale of a home, business, or other major asset can impact your financial situation and require an estate plan update. Be sure to review how the sale affects your tax planning, your wealth distribution, and any existing trusts. Updating your estate plan after the sale of a major asset ensures that your current financial standing is accurately reflected.
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Retirement
Transitioning to retirement changes your financial priorities and healthcare needs. An updated estate plan should reflect this shift by reviewing healthcare directives, adjusting beneficiary designations, and accounting for new income streams.
- Death of a Beneficiary
If someone named in your estate plan passes away, it’s important to revise your documents to reassign their share of assets and update any relevant trusts or wills.
In conclusion, knowing how to update your estate plan after major life changes ensures that your wishes and your loved ones are protected. Whenever a significant event occurs—such as marriage, divorce, or the sale of an asset—it’s important to take action. Be proactive about keeping your estate plan current so that it accurately reflects your life’s circumstances.
Don’t wait to update your estate plan. Review it regularly and consult with an estate planning professional to make sure your wishes are carried out as intended.
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