Is It Time To Update Your Estate Plan?
Is It Time To Update Your Estate Plan?
By Matthew A. Ferri, Esq. You might not think you need to update your estate plan. If you read our last post on the different things that can go into an estate plan, you may have thought to yourself, “I had a basic will and powers of attorney drawn up years ago, I’m all covered” and went about your day. But, if that is the case, ask yourself, has anything changed in your life since you made your estate plan? A follow up question is, will my trust and estate plan still work?
In these changing times, it is not enough to examine our own life, but we must also look at the world around us. Has anything changed in the economy, local or federal laws, politics, or society that changes the way your estate plan works?
For your living trust and estate plan to work properly, it has to name the right people.
Not only as who your beneficiaries are, but also for who will be in charge when you’re gone or incapacitated.
Life Events That Trigger An Estate Plan Update
Many things may cause the need to update your estate plan, here is a short list of personal life events:
- If you were single when you first planned and have since married or had children that could change who you want to inherit. It could also mean you want your new spouse to make your financial and medical decisions if you were not able, and not a parent for instance.
- Or, if you went through a divorce, you would want to make sure your ex-spouse is not inheriting under your estate plan, and not the one who is in charge of your financial, medical, and legal matters if you are incapacitated and cannot handle them yourself. You may need to not only amend your estate plan, but also your life insurance and retirement account beneficiaries.
- If you remarry and have a blended family, you will need to amend your will and trust. Stepchildren and foster children do not automatically inherit or have any rights to inherit or to make decisions for you. They must be specifically named in your estate plan, or they will have no rights.
- If you have children, you should look at whether they can handle inheriting outright. If not, do you have someone you trust named in your trust? Someone who will help them with financial matters until they are responsible enough to handle it themselves.
- If you have minor children, you also want to check who you have named as guardians. Make sure they have not moved, where your children would potentially be uprooted in the future. Ensure that they are still financially able to care for your children, or that their values are still in-line with how you would want your children raised if you could not be the one to raise them.
- If due to illness or injury, one of your children or beneficiaries receive disability benefits, you will need to change your estate plan. In order to avoid losing their benefits when you die, a simple last will or trust is not sufficient. You will need a special needs trust.
- If state, local, or federal law regarding inheritance, taxes, property, guardianship, disability, trusts, or probate has changed, you may need to make significant changes to your estate plan.
Review Your Estate Plan Regularly
It’s important to have an estate plan in place, but it’s also important that you update your estate plan regularly. Making sure it is current ensures it will continue to work the way you want it to.
If your attorney or financial advisor has a regular maintenance program, you should sign up for it. If they do not have maintenance programs, you should consider changing attorneys and financial advisors. Your attorney and financial advisor should provide you with questions to identify issues. You should review these questions with your advisors at least once each year.
So, if you already have an estate plan in place, when is the last time you looked it over? We are here to help you, just a phone call away (248) 409-0256.
About The Author
Matthew A. Ferri, J.D., M.B.A., is the Founder and Principal of Life Focus Planning, a Michigan based estate planning law firm. He is an estate planning attorney with offices in Bloomfield Hills, Michigan and Shelby Township, Michigan.