July 2024
Financial Planning

Updating Your Estate Plan

By Myra Alport

Myth – You need a high net worth to have an estate plan. 

Truth – An estate plan is a vital tool to protect your legacy to ensure that your wishes are honored, and your loved ones are taken care of no matter the size of your estate.

Your estate plan is not a one-time document; it is a living document that may need to be reviewed to reflect your current situation, relationships and wishes.  Life takes many twists and turns; federal and state laws change. Here’s why you might need to revisit and revise your estate plan:

1. Changes in Family Dynamics

• Marriage or Divorce: Getting married or divorced significantly impacts your estate plan. You may want to include or remove a spouse as a beneficiary.  Give special consideration to blended families in the case of remarriage. 

• Birth or Adoption of Children: New children or grandchildren might need to be added as beneficiaries or for guardianship.

• Death of a Beneficiary or Executor: If someone named in your will or as an executor passes away, you'll need to update your documents to reflect this change.

2. Significant Financial Changes

• Major financial changes, such as acquiring significant assets, selling property, or experiencing a financial setback, necessitate an update to how your estate will be distributed.

• Inheritance: Receiving an inheritance can impact your estate plan, requiring adjustments to account for new assets.

3. Changes in Law

• Tax Laws: Changes in federal or state tax laws can affect your estate plan, especially concerning estate taxes, gift taxes, and inheritance taxes.

• Estate Planning Laws: State laws governing estates and wills can change, and your plan needs to comply with current legislation.

4. Relocation

• Moving to a Different State or Country: Estate planning laws vary by state and country. If you relocate, you should update your estate documents to ensure they align with local laws.

5. Changes in Relationships

• New Relationships: Forming new significant relationships, like a long-term partner or close friend, might lead you to include them in your estate plan.

• Estrangement: If you become estranged from a beneficiary, you may want to remove them from your will and financial accounts. 

6. Health Changes

• Major Health Issues: If your health significantly changes, it’s crucial to review your healthcare directives, powers of attorney, and other related documents to ensure they reflect your current wishes and designate the right individuals to make decisions on your behalf.

7. Changes in Executor, Trustee, or Guardian Preferences

• Reevaluation of Choices: Over time, you might decide that the individuals you initially chose to manage your estate or care for your children are no longer the best choices. Updating your documents allows you to appoint new trusted individuals. 

8. Changes in Your Beneficiaries' Circumstances

• Beneficiaries’ Needs: The needs and circumstances of your beneficiaries may change. For example, a beneficiary might develop special needs or face financial difficulties, requiring adjustments in how you leave them assets.

• Beneficiary Maturity: As your beneficiaries grow older and their financial acumen increases, you might want to change how and when they receive their inheritance.

9. Adding or Changing Charitable Contributions

• Philanthropic Goals: Your charitable goals may evolve, leading you to add or remove charitable organizations from your estate plan.

It’s generally recommended to review and update your estate plan every 3-5 years, even if no significant life events have occurred. This ensures that your plan remains current and effective.

Please reach out to your advisor for further guidance. 

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