Many people know the benefits of planning their estates as early as possible in their lives. However, few people know that writing wills, setting up trust funds, and executing estate plans are just the beginning. Life's changes call for regular updates on these plans; for example, updating your estate plans may be necessary after these three changes:
Your Marital Status
Your spouse is an integral part of your estate plan—not only by virtue of being your loved one, but also because they have the legal right to inherit from you. This means your former partner may inherit from you, even if you don't want then to, if you forget to update your plans after a divorce. At the same time, if you get married and die before including your spouse in your estate plans, they may have a hard time inheriting from your estate if you've specifically designated it to go to someone else.
It's not just about inheritance, however, because you may want your spouse to play a role in the administration of your estate after your demise. For example, many people name their spouses as executors in their estate plans; if you did that, you may change your mind after a divorce, and that calls for an update of the estate plans.
Your Net Worth
You should also consider changing your estate plans if your net worth increases or decreases substantially; sometimes it may be necessary to do so. Consider a case where you are an entrepreneur and most of your income comes from a single company. If that business folds and leaves you with considerable debt, you need to update your estate plans to take care of the debts. Not only that, but if you had mentioned some people as beneficiaries of the collapsed business, you will need to remove that part of your estate plans too.
Your Beneficiaries Age
Lastly, it may also be a good idea to update your estate plans if your beneficiaries have aged considerably since the last time you made the plans. This is because people's needs change with time, and you need to address your beneficiaries' current needs. For example, if you have young children, it's necessary to ensure that your estate plans have provisions for their education. However, that may not be necessary if the kids have grown up and completed their education.
As you can see, an estate plan is not something you come up with once and forget about. Every time a significant change occurs in your life or in your beneficiaries' lives, you need to analyze the impact of the change on your estate plans and accommodate it appropriately. For additional information, contact an estate planning attorney at a law firm such as Acton & Snyder, LLP.