Putting together an estate plan is an important step towards caring for your loved ones. In addition to designating the distribution of assets, the conversations that come with putting together your plan can also lead to a better understanding of your financial situation. This can lead to adjusting investment strategies and making use of tax saving tools – ultimately helping you to make the most of your wealth.
Once you have a plan in place, it is common to ignore it. Although it does not require regular maintenance like other parts of your portfolio, there are times that warrant a review and update. Three of the most common include the following.
#1: Changes in the family
Welcoming a new family member through birth, adoption or marriage or losing a loved one through death or divorce can directly impact your estate plan. Use any of these life events as a reminder to review who you have listed as heirs and on power of attorney documents. These changes to your family structure may mean you need to update who is listed on these documents.
#2: Changes in wealth
A new job, business opportunity or inheritance that significantly impacts your assets can shift how your plan works. Review the language used on these documents and see if it still meets your wishes.
#3: Changes to the law
The law is always evolving. Changes to tax law can directly impact your estate and may warrant a need to make adjustments to your estate plan. Keep current on changes and reach out to your estate planning team if you are concerned the change impacts your plan.
Making sure you update your plan wisely
These changes require more than just a review of your will. Those who have trusts may need to make sure the provisions within the trust are still in line with their goals. It is also important to review and update beneficiary designations. This is something that is often missed and can lead to unintended individuals getting assets that you would prefer to go elsewhere.
