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Signs It Is Time to Update Your Estate Plan

by | Aug 24, 2022 | estate planning, legacy planning, trusts

Estate planning is an important aspect of financial planning for the future. Life changes, and sometimes quickly, so it is vital not to neglect revisiting or revising your estate plan. While it is recommended to update your estate plan every few years, some major life milestones may trigger a need for change sooner. 

Why Do I Need an Estate Plan?

Estate planning is an essential aspect of planning for your future. Although many individuals overlook the importance of an estate plan and may put it off until towards the end of their life, you can create an estate plan before you are elderly. Simply put, an estate plan is the process of making sure your assets are managed in the case of your death or that you are incapacitated. The best time for creating an estate plan is right now, regardless of your age or your wealth. An estate plan can be designed for your individual needs and be of any size. This will ensure that your important last wishes are known, as well as your assets are accounted for. 

What Should an Estate Plan Include?

An estate plan should include everything to make sure that your estate is secured for the future, in the case that you are unable to do so yourself either because of death or incapacitation. An estate plan may include these documents:

  • Living Trust. Your living trust will help to distribute your assets during your lifetime and after your death. 
  • Schedule of Assets. This document will contain a list of your assets. 
  • Last Will & Testament. This is a legally binding document that details how you want your assets distributed. 
  • Living Will (aka Advanced Health Care Directive). This document helps to determine your medical preferences if you are unable to make decisions for yourself. 
  • Power of Attorney. This will designate a trusted individual to manage your personal, as well as business, responsibilities if you are unable to do so for yourself. 

Changes in Tax Laws

Tax laws can change overtime. In recent years, federal and state estate tax laws have changed quite a bit. Changes in legislation means that you will want to reevaluate your current plan. For instance, the passage of the SECURE Act has made changes to inherited retirement accounts. This means you will want to review your beneficiaries and their financial situation to determine if beneficiary designations need to be changed. Reviewing your estate plan with regards to tax laws can help ensure that you make the most out of your trust for yourself and your beneficiaries. 

Changes in Your Goals

While your life is changing, your goals for your estate plan may have changed as well. It is important that you embrace these changes and understand that your estate plan should be flexible to your life. Your previous goals may have focused on providing financial security for your children. However, as you have grown older, your goals may have shifted to asset protection. If your wealth and assets have grown, you may be wanting to donate to charitable causes or include more beneficiaries. Meeting with an estate planning attorney can help you structure your estate plan to meet your current goals, as well as revisit your estate plan to make necessary changes from time to time. 

Changes in Your Circle of Trust

As life changes, so can our circle of trust. Those who we entrusted years ago may no longer have proved themselves to be trustworthy. In the case of your death and distribution of your estate, trust is a key element. Your estate plan will assist in making the decision of who to appoint to make financial, as well as medical, decisions on your behalf. While you will name the executor, trustees, and potential guardians, who you entrust to these duties could change over time. You should feel confident in naming that individual for the role, as you feel they will carry out their responsibilities. 

Major Life Changes that Warrant a Review or Revision

Major life changes can happen at any point and it is important that you review your estate plan during those times. This is because a revision may be necessary in some instances. These life changes may include:

  • You have gotten a divorce and want to remove your ex from your documents. 
  • You have gotten married and would like to add your spouse. 
  • You have remarried and want to include your new spouse or their children. 
  • You have had children and would like to name them as beneficiaries. 
  • You have grandchildren and would like to name them as beneficiaries. 
  • Your financial position has changed, meaning you need to include or remove some of your assets. 

 

Note: These are only a few examples. You will want to discuss your needs with a professional and you are able to make changes whenever and however you see fit to your estate plan. 

How Can I Update My Estate Plan?

Updating your estate plan is more common than you probably think, as many people do it many times throughout their lifetime. This is due to major life events, financial situations, and changing relationships. Estate plans should not be a one and done process, as this would hinder the ability to fulfill your final wishes. You will want to ensure that your estate plan is up to date with your current living situation, as you will want your wishes executed appropriately. Discussing your estate plan, as well as your current situations, with a professional estate planning attorney can help you properly navigate the process. 

Speaking with a Professional California Estate Planning Attorney

estate planning consultation

Your estate plan should flow and change as your own life changes. At Galanti & Copenhaver, we take an individualized approach to the estate planning process as we understand the flexibility that is needed when it comes to changes within your life. Our team is experienced in managing the complexities and unique situations that can sometimes coincide with the estate planning process, assisting in streamlining the process. Call our office today to set up an initial consultation!