Many people think that creating a Will or Trust is something you can do once, and then your family and assets are protected forever after. We are often made to think that way, but this could leave your family with a big mess when something happens to you.
Life events can drastically affect your estate plan and even cause your plan not to work in the way you intended. To make sure your plan remains up to date throughout your life, we recommend reviewing your plan at a minimum of every three years.
If any of these 10 life events happen before your three-year plan review, you’ll want to have your plan professionally reviewed right away. Let’s take a closer look at these 10 life events and how they can affect your estate plan and what changes may be required.
01 | Your Assets or Liabilities Changed
Life is full of changes, and your financial situation is unlikely to stay the same over time. Changes in your assets, such as acquiring a new home or other assets, selling property, or incurring debt should prompt a review of your estate plan. You may need to update asset distribution, beneficiary designations, and financial provisions to reflect these changes accurately and ensure that the people you love receive what you intend when you die. Your asset inventory needs to be updated with every change. The biggest risk to your family in the event of your incapacity or death is that they do not know what you have, where it is or how to find it. This step is often overlooked, and we include creating the inventory in our process.
02 | You Bought, Sold, or Started a Business
Owning a business adds another layer of complexity to your estate plan. If you’ve recently bought or sold a business, it's important to update your plan to reflect what you want to happen to your business if you cannot run it, to ensure a smooth transfer of management or ownership (if desired), and create a plan to protect your business assets for yourself and your loved one’s future.
The financial and personal value of your business can be a significant gift to your loved ones both today and for years to come - if you set up the business structure in the right way.
03 | You Gave Birth or Adopted a Child
Welcoming a new child into your family is an incredibly joyful moment. As a parent, your estate plan should be updated to include provisions for your child's well-being and financial future. This includes naming guardians for minor children, creating a Kids Protection Plan, and ensuring their financial security through trusts, insurance, or other means.
It’s also important to document your wishes for your child’s education, religion, and educational values in your plan so that their legal guardians will know how you would want your child raised if something happened to you.
04 | Your Minor Child Reached the Age of Majority (or Will Soon)
As your children grow up and become legal adults, it’s time to review how they will receive their inheritance and make sure they understand how important it is that someone can legally make healthcare decisions for them and manage their money in the event they become incapacitated. Depending on their level of maturity, you may want to consider if they are ready to handle inherited assets on their own and if so, what amount.
A Lifetime Asset Protection Trust is an estate planning tool that allows your child’s inheritance to be used to support your child’s future while safeguarding its use and protecting it from any potential future lawsuits or divorces your child may face later in life.
This ensures that your children are financially secure as they head into adulthood while also supporting your children with financial responsibility.
05 | A Loved One Dies
The loss of a family member is emotionally devastating, and it can significantly affect your estate plan. If a deceased loved one was a recipient of assets under your Will, Trust, or financial accounts, it's important to update these documents to make sure your assets will be distributed to the right people.
If the deceased individual was designated as a Trustee or Executor of your estate or a Guardian of your minor children, you will need to appoint new individuals to fill these roles.
Planning for Life’s Changes
Your estate plan is the foundation that protects your family and your finances today and in the future. Estate planning is not a set-it-and-forget-it task; your estate plan should change and evolve with the changes in your life.
If you've recently experienced a significant life event or it's been a while since your last estate plan review, consider reviewing your plan. If you haven’t created an estate plan yet, consider doing one now. It’s better to plan early, before anything happens, than to scramble when the unexpected happens, or to have no plan at all.
To get started, schedule a free 15-minute call to learn more about our process and how we do estate planning. At our first in-person meeting, we’ll discuss your family dynamics and goals, address recent or expected changes in your life, and design a comprehensive estate plan that brings you peace of mind.
Don’t forget to return next week when I’ll be discussing five more life events that signal it’s time to review your plan.
This article is a service of Rayboun Winegardner, PLLC, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.
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