5 Reasons to Immediately Update Your Estate Plan

If you have an estate plan in place already, you are ahead of the curve in the United States. Surveys indicate that despite understanding how important estate planning is, over half of all Americans do not have a plan. While you deserve to pat yourself on the back for putting together your initial estate plan, do not make the mistake of thinking that you can forget about the issue of estate planning from here on out. On the contrary, your initial estate plan needs to be reviewed and revised throughout the course of your lifetime to ensure that it remains relevant. Routine reviews should occur on a regular basis; however, there are also events that should trigger an immediate update to your estate plan. An Indianapolis estate planning attorney at Frank & Kraft explains five reasons to immediately update your estate plan.

1. Marriage. Marriage will typically prompt you to include your new spouse in your estate plan. That may include changing the beneficiary designations on things such as your Will, retirement plans, and life insurance policies as well as changing fiduciary positions, such as the Executor of your Will or the Trustee of a trust, within your plan. The marriage of a child is also something that could trigger a review because your son/daughter-in-law could now stand to gain control over the inheritance you plan to leave your child. 
2. Divorce.  Failing to make changes to your estate plan after a divorce can be a serious mistake. Although you may need to wait until the divorce is final, failing to update your plan at that point could result in several unwanted consequences. For example, an ex-spouse could remain the beneficiary of your estate assets and/or an insurance policy. That same ex-spouse may also end up making medical decisions for you if you are incapacitated if you do not update your estate plan following the divorce.
3. Retirement.  Retirement should always trigger a review of your existing estate plan. When you retire, you may start withdrawing funds from retirement accounts and selling major assets which should warrant a review of your plan. In addition, if you have not yet considered the addition of a Medicaid planning component to your estate plan, you will want to do so to ensure that you qualify if you need to down the road. Finally, if you relocate for retirement, you need to make sure that your estate plan complies with the laws of your new state/country.
4. Death of a Fiduciary. You likely have named at least one person to a fiduciary position within your estate plan. Common examples of fiduciary positions include Executor of your Will or the Trustee of a trust. If one of the people you appointed to a fiduciary position dies, you need to review your plan and choose someone to replace him/her.
5. Your Children Reach the Age of Majority. If you have minor children, protecting your children’s inheritance within your estate plan is crucial because they cannot inherit directly from your estate. That often makes estate planning both more important and more complicated. When all your children have reached the age of majority, however, you have the option to gift assets directly to them. That typically requires you to review and revise your entire estate plan accordingly.