When should I update my estate plan?
If you have an estate plan in place, you are already ahead of the curve. About half of adults in America don’t have basic estate planning documents, including a will, power of attorney, and a living will. If your basic estate planning documents are in place, you are doing better than most in protecting your assets for heirs and beneficiaries.
But an estate plan is not a one-time event. Common life experiences make updating an estate plan essential. Even just the passage of time makes modifying an estate plan necessary. An estate plan that meets your needs when your children are minors will not necessarily be adequate once they reach adulthood, for example.
Creating and updating an estate plan to meet your needs
Every estate plan should be uniquely tailored to your needs, and your needs will change over time. Significant events that happen to you and your family will require an updated estate plan. Family events that require modification or creation of a new estate plan include:
- A change in your relationships, including marriage and divorce
- The death of a spouse
- The birth of children or grandchildren
While many people consider an estate plan a largely financial document, most estate plans can account for a change in financial circumstances. In certain instances, however, a financial event is the impetus for the creation of an estate plan. Significant financial events include:
- Inheriting wealth
- Starting, acquiring or selling a business
- Declaring bankruptcy
- Reaching the federal estate tax exemption amount in assets
Finally, health events will also affect your estate plan. For example, 70 percent of people currently aged 65 or older will require long-term care at some point in their lives. Yet few have planned for this. With the costs of long-term care costing as much as six figures per year, preplanning is essential in order to protect assets for children. An estate plan for someone at or approaching retirement should therefore account for the potential need of long-term care.
The health of beneficiaries is also relevant. A disability may mean a child may benefit from a special needs trust to care for his or her health, for example.
We can help
There is a reason why many Americans don’t have an estate plan. Thinking about your own mortality, future health issues, and your finances when you aren’t around to control them is not easy. However, by regularly updating your estate plan, you can ensure that your loved ones are cared for and that your own wishes are prioritized in the distribution of your estate.
At Whitlock Canter, LLC, our estate planning attorneys can advise you on whether your current estate plan meets your needs. Contact our office to discuss your legal options and the best estate plan for you.