When you fulfill a stressful, demanding personal responsibility, you with no doubt prefer to never need to complete that particular task again. However, that may not be a very realistic expectation, especially when it comes to your estate plan.
You can’t draft a will and advance directive when you are 18 and then expect those same documents to continue protecting you for the rest of your life. You will need to add additional documents to your estate plan and update the existing paperwork.
How often do you need to update your estate plan to protect yourself and the people you love?
Whenever your family changes
Did you just become a first-time parent? Has your spouse died or filed for divorce? Did your younger sibling, who you previously named in your power of attorney, move across the country?
When your family circumstances change, your estate plan typically needs to change as well. Anytime you add new family members or lose someone you love, you will likely need to update your estate plan to reflect those new circumstances.
When your financial situation changes significantly
People often need to update their estate plans when they take on new debts, acquire new property or reduce their personal holdings. You may need to increase your life insurance coverage and change how you pass on other property when you become a homeowner. If you start a business, you will need to leave plans for the company’s management as well as the transfer of ownership. Acquiring new assets or arranging the sale of existing property will both require changes to your estate plan.
When your health changes
One of the more personal reasons to make updates to your estate plan will not be external but rather internal. After your doctor diagnoses you with a serious medical issue, you may need to adjust your estate plan.
Health issues have a way of changing people’s ideas about the legacy they leave behind and about what medical treatment they want to receive. You may need to change your estate plan when your understanding of your health changes.
Every few years, just in case
It is far too easy for someone to overlook the potential impact of certain life changes when they first occur. Then, as they adjust to those changes, they may fail to make the necessary estate planning updates.
You might want to review your estate plan every few years just to ensure you don’t have any out-of-date beneficiary designations or major assets unaccounted for in your paperwork. Knowing when to start estate planning and when your documents require updates will help you derive the most protection possible from your estate plan.