Your estate plans can achieve three primary functions. They can protect you in the event of a medical emergency. They can help you provide for your loved ones in an emergency or after your death. They also allow you to leave a specific legacy behind when you die.
Your needs and wishes related to all three of those functions may change throughout your life. The best estate planning documents are highly specific, which may mean that you have to go back and make changes to them repeatedly when different parts of your life change.
What are four of the most common situations that prompt a review of someone’s estate planning choices?
1. Changing your marital status
Whether you are about to get married and hope to start a family soon or you just got served with divorce papers after two decades with your spouse, a change in your marital status will inevitably require a change in your estate planning documents. You will need to include your new spouse as a beneficiary or authorize them to handle matters on your behalf when you get married or remove them from documents when you divorce.
2. Changing the size of your family
Maybe your spouse just had a child, or perhaps you experience the tragedy of someone in your immediate family dying. When you add or lose members of your family, you typically need to make changes to your estate plan. Adding new children as beneficiaries can be as important as removing deceased individuals from testamentary documents and positions of authority.
3. Acquiring or losing assets
Did you just sell your business? That may mean that an entire section of your estate plan is no longer necessary. Did you recently buy a vacation home? Such a valuable asset likely requires inclusion in your will or trust. The more valuable an asset is, the more important it may be to update your estate plan when your personal portfolio changes.
4. Learning about changing health needs
Perhaps your doctor recently diagnosed you with a progressive medical condition, which makes you reconsider your stance on life support. On the other hand, maybe you are very healthy and recently had children. You would want to receive all necessary interventions to keep you alive so that you can care for your children if you experience some kind of medical emergency. Throughout your life, your personal circumstances and health will influence your preferences regarding medical care.
As your situation changes, you may need to update your documents to reflect your new needs and preferences. Recognizing when it is time to update your estate plan is as important as taking the time to create documents in the first place.