You already understand the importance of creating an estate plan to reflect your wishes and take care of your loved ones in the event of your death or incapacitation. You may have already gone through the process of creating a will, appointing guardians for any minor children, and naming a power of attorney (POA).
And you may believe that once you complete your estate plan, you no longer need to worry about it. However, several situations require you to review and update your plan.
1. Marriage or divorce
Upon marriage, you will likely want to change the beneficiaries of your estate and give your spouse the authority to make healthcare and financial decisions on your behalf if you can’t do so.
Likewise, a divorce would necessitate the removal of your spouse from those roles.
2. Birth or adoption of a child
A new addition to your family is cause for joy and celebration. It’s also a reason why you should update your estate plan. You will want to include your new child as a beneficiary in your will and name a guardian to care for them if you and your spouse die.
You may also wish to establish a trust to manage any inheritance they may receive or pay for their education.
3. Change in tax laws
Part of estate planning is trying to eliminate tax liability as much as possible so that most of your wealth stays with your family. However, tax laws frequently change, so you will want to make sure your estate plan reflects those changes.
As your life changes, your estate plan should change with you. In addition to significant life events, setting up a review every few years can help provide peace of mind that your current wishes will be upheld and your loved ones are taken care of.