Review which life events might lead you to update your will or estate plan.
Big changes in your life should lead you to reassess your goals and review your will and estate planning documents. Reevaluating your plans after a major life event can help ensure you’re protecting your loved ones and your assets. The longer you wait, the more likely it might be that you’d forget to make the proper changes to your will and estate plan.
Some life changes that might prompt you to make updates include:
- Change in Assets: If you have a significant increase or decrease in your assets, or if you've cashed in or transferred an asset, you may need to reassess your will and estate plan. Check that your assets are all accounted for in your planning and that you have the appropriate beneficiaries selected.
- Change of Employment: Starting a new job or entering retirement could significantly alter your income. After shifts like these, you may need to reevaluate your long-term savings and how your new income stream will affect your end-of-life planning.
- Change in Marital Status: Any kind of marital event in your family, whether it’s a marriage or a divorce, should cue you to review and edit your insurance and estate planning documents. Changes in your marital status may make it very important for you to update beneficiaries or reevaluate how you want to transfer your wealth.
- Births: Along the same vein as marital changes, new additions to your family should spur you to review your plans. For example, you might wish to add your new baby as a beneficiary of an insurance plan or trust. Also consider if you want to pass on your assets in a different way after the birth of a family member.
- Deaths: The loss of a loved one may require you to update your beneficiary or legal guardian designations and your estate planning plan. This is important to ensure your estate plan remains in line with your wishes. For example, if a beneficiary is deceased and no alternative beneficiaries are listed, your distribution may be decided by state law.
- Changes in State or Federal Laws: Laws can change over time and vary by state. Keep up with state and federal laws to ensure your legal documents are legitimate and effective. Changes in tax law may also cause you to revise your wealth transfer plans.
Regardless of any specific life events or legal changes occurring, it’s a smart practice to review your will and estate plan every five years. Working with financial and legal professionals to help draft important legal documents may also help you create effective plans for your estate.
Learn more about the importance of a legacy review of your estate plan.
