All adults should have an estate plan in place that allows them to provide their wishes for their assets when they die. This plan does much more than that. It can also set the terms for someone to have power of attorney over that individual’s finances and their medical care.
It’s important to know that once you set your estate plan, you can’t just forget about it. There are times when your estate plan needs to be reviewed and potentially updated.
Events that should trigger a review and update
Certain life events, such as marriage, divorce or having a child, mean that you need to review the estate plan. This is a time for you to ensure that everyone who should be included in the plan is in their correct place.
You also need to review the estate plan. If you buy or sell a home, start a business or inherit money. In fact, any change in your assets should trigger an estate plan review. The estate plan should only include assets that you currently own, and all the assets you currently own should be included only once.
It’s also necessary to review and update an estate plan if anyone named in it passes away. This can include beneficiaries or the executor. The same is true if there are changes in your location, such as moving to a new state, or if there are new estate planning laws.
Even if none of those situations apply to you, you should still review your estate plan every three to five years to ensure that it still reflects your current wishes. Working with someone who’s familiar with these matters may be beneficial, so you can ensure that everything is set up in a legally binding and enforceable manner.