Eight Reasons It’s Important to Update Your Estate Plan

Change happens. That’s why you need to review your will or trust regularly.

Most people know that having an estate plan is important (even if they still haven’t created one). But fewer know that it’s also crucial to update your estate plan regularly.

Instead, most people file their will or trust in the back of a desk drawer or safe. They view estate planning as a “once and done” task. The documents aren’t viewed again until it’s time for an executor to take charge … and by then, it’s too late for changes.

That’s decidedly not how an estate plan is designed to work. You must update your estate plan to account for life’s constant changes: ever-evolving tax laws, life changes, and even your own preferences. Let’s face it: Do you really want your ex to get the balance of your investment accounts, simply because you forgot to review a beneficiary designation or change a line in your will?

Is poring over the documents that spell out your mortality fun?

Of course not. But updating your estate plan is part of being an adult, and there’s no excuse for causing your heirs undue heartache.

While life changes do not always require you to update your will or trust, it’s a good idea to have a quick conversation with your estate attorney. Sometimes they can point out better ways to take advantage of tax-saving strategies for your heirs—and that can be reason enough to update your estate plan.

And if it’s just a simple change, you probably won’t even need an attorney—you can make limited revisions or additions using a signed, dated document called a codicil.

Here are eight reasons to update your estate plan today.

1. Marriage or Divorce

A change in marital status necessitates a will update. Whether it’s to protect your new spouse, protect your assets, or reflect your wishes, it’s essential to review your will or trust.

2. Birth, adoption, blending families

The birth or adoption of a child, addition of step-children, or the addition of grandchildren is a time to celebrate. It’s also a time to update your estate plan. You’ll want to include them as beneficiaries and choose a guardian for their care.

3. A Need to Change The Executor

Have you checked on your executor lately? If they cannot or will not serve, or your relationship has changed, you’ll need to choose another. (It’s a good idea to list an alternate to deal with this possibility).

4. Moving to another state or country

Estate laws can vary significantly between states. If you’re moving, it’s crucial to ensure that your will complies with the laws of your new locale.

5. Acquiring New Assets

Whether you’re buying another home, a piece of land, a classic car, investments, or pricey personal items, your will or trust should be updated to reflect significant acquisitions.

6. Financial Changes

Did you just get a significant raise? Win the lottery? File for bankruptcy? Get laid off? If your assets have gone up or down, your will or trust could be affected. Review your estate plan to ensure your assets are evenly distributed.

7. Tax Law Changes

It seems like tax laws change constantly. Keep the IRS at bay by ensuring you update your estate plan. There’s no need to burden heirs with unexpected taxes.

8. A Change In Beneficiaries’ Circumstances

Maybe one beneficiary has a very generous, six-figure salary, while another has faced nothing but hardship. Updating your estate plan is the best way to ensure your assets are distributed in a way that best supports your loved ones.