Surveys tell that more than 55 percent of Americans die without a valid will. Of the 45 percent that do, 71 percent of them don’t update their wills during their lifetime.
This is a big mistake.
Some life events tell you to update the estate plan immediately. Let us list them so that you are aware of these instances.
People that get married, or those that are getting married for another time, have a lot to plan for. Many people get taken up by the events that happen around them, including wedding and honeymoon planning and maybe having some children till they forget that estate planning exists.
When you get married, this is the perfect time to update your existing plan, which can be as simple as updating your emergency contractors or chancing the list of beneficiaries. It might also mean buying your first insurance policy.
You need to know that when you fail to update your plan, your spouse won’t is regarded as the primary beneficiary.
Some people will change their succession plans when they divorce. However, these changes are determined by the type of divorce you go through. If the split is terrible, then you might end up erasing all the names of your spouse from the documents.
If there are kids in the picture and you part amicably, you might leave part of the property to your ex, particularly if you don’t have custody of the kids.
After a divorce, update beneficiary designations, power of attorney, health care directive, and health care proxy.
A New Baby
When you have a new addition to the family, whether by giving birth or through adoption, you need an estate plan review. First, it is prudent that you name guardians to the kids in your will, or if you don’t have one already, to create one.
When you write a will, you should include your bundle of joy as a beneficiary.
As the kids grow, it is a good idea to assess them periodically to know whether they still hold the same importance in your will. Initially, you might have an idea of distributing your estate equally among them, but with time, you might change this.
The main aim of updating your will is to prevent family feuds after you are deceased.
When a Beneficiary Passes Away
When a potential beneficiary passes away, it is time to update this will so that it reflects the changes. It doesn’t apply to the beneficiaries alone, but fiduciaries as well.
If your power of attorney, health care proxy, or potential executor passes away, you must name new ones to replace them. Alternatively, simply elevate the alternatives to the leading position and then name a new alternate.
When a beneficiary dies, you need to strike off their names from the list of beneficiaries and then reassess the wealth distribution.
Additionally, if a guardian dies, you need to appoint a new one to take their place.
Many times, the act of losing a loved one usually inspires us to put a plan in place before it is too late.
When your doctor diagnoses you with chronic illness, and you are faced with mortality, you need to start an estate plan before you become incapacitated.
The first step is to identify people that will handle your legal, financial, and health decisions when you can no longer be able to do so on your own.
You can then come up with an advance health care directive to aid you to make resolutions on medical procedures that can be used to prolong your life. These are important because when you become incapacitated, many things tend to stop.
New State and Federal Laws
When the laws of the land change, you need to update your estate plan as well. This is a suitable time when you need to talk to your estate planning lawyer to help you asses and update your plan the right way. They also know which part has changed and will make the whole process faster.
We have various life events that make you have to change your estate plan. Make sure your plan is up to date so that you don’t leave any update out, or you don’t leave out a new beneficiary. Make sure you talk to your estate planning lawyer to see what changes affect you and to modify them the right way.