1. Adding and Removing Beneficiaries (Birth or Death in the Family, Etc.)
Significant life events can be undeniably overwhelming. Notably, the birth and death of family members can create a lengthy to-do list and occupy a great deal of brainpower. Something to add to your list: update your estate plan. Whether it be a (revocable or irrevocable) trust, last will and testament, or another estate planning document, it is essential to keep your last wishes up-to-date.
Those with foster children and/or stepchildren will also want to review estate planning documents when welcoming said family members into their life. Dying intestate, in which one dies with no will or without a valid will, leaves the distribution of your assets to state law. Since there is a likelihood that non-blood relatives (particularly foster and stepchildren) are not recognized as legal heirs under state law, it is safest to include them in your will according to your distribution preferences.
2. Change in Marital Status
One major estate planning conflict to avoid is neglecting to remove a former spouse or partner from documents when you have separated. Keep in mind that in the event of a divorce, your estate plan should be updated once the divorce agreement is finalized. State laws vary regarding the treatment of former spouses, but it is always safest to keep your plan as current as possible.
Alternately, if you have a significant other you would like to include as a beneficiary, and you are not legally married, it is vital that you take the steps toward including this loved one in your estate plan.
3. Acquisition of Assets
If you recently became a homeowner or acquired a valuable asset – Congratulations! As it relates to estate planning, it is essential that you keep an organized, accurate record of any property and other high-value items under your ownership. Assets can be distributed in several ways (for example, through trusts and wills), and it is up to you how these assets will be transferred upon death. Updating your estate planning documents involves re-assessing the assets you own, which is not limited to real estate. You may update your estate plan to designate which beneficiaries will inherit other assets, such as vehicles, family heirlooms, funds, and special equipment.
4. Routine Check-Ups
Get in the habit of revisiting your estate planning documents. Some prefer to review their estate planning documents yearly (some multiple times a year), while others update their plan with less frequency or as the need arises.
Changes in state or federal tax laws may affect your estate distribution choices. Over time, you may also have a shift in perspective in relation to medical procedures or treatments included in your advance directive. Whatever the case, it is highly advisable to ensure your estate plan is always a true reflection of your desired outcome.