If your marital status changed or you’ve experienced another major life event, it’s important to consider the impact on your estate plan.
The irony is that after taking the considerable amount of time and effort to put together a solid estate plan, most people don’t make crucial updates when necessary, which can cause havoc if they pass away unexpectedly.
Ideally, people should review their estate plans every three to five years, but the following events should also trigger immediate revisions.
Divorce
Ending a marriage is a major life event, which will almost always require a revised estate plan.
In both California and New York, a divorce legally and automatically removes an ex-spouse from receiving property or acting as your executor or power of attorney. It also dissolves any living trusts. Even so, revising your estate plan is strongly recommended for the sake of your heirs.
Marriage
Naturally, getting married should be an occasion to review your estate plan, so asset distribution to your new spouse and heirs is performed per your express wishes, rather than possibly turning into a legal circus.
Getting remarried will certainly necessitate updates to your estate plan or your new spouse may end up in a legal quagmire with other heirs.
The birth or adoption of children or grandchildren
Though intestate succession will direct assets toward your descendants, it can be a lengthy and extremely stressful process. Make sure each child and grandchild is accounted for in your estate plan.
This revision should include arrangements for guardianship, should you pass away while they are still minors.
When children or grandchildren become legal adults
Asset distribution is quite different for adults and minors. Make sure your estate plan accounts for these life events.
Major changes in financial circumstances
Whether it’s a gain or loss, this should be reflected in your estate plan. Examples include buying/selling property, inheritance, retirement, a significant change in income, and financial windfalls or losses.
Changes to your health
If you become sick or disabled, financial planning and your advance healthcare directives should be updated urgently, in case you become unable to speak or communicate. It’s also important that power of attorney instructions are updated, if necessary.
The death of a beneficiary
Again, certain automatic legal mechanisms will account for this, but for the sake of surviving heirs, it’s better that your estate plan explicitly reflects this.
The passing of a loved one is a stressful time. When assets, money and property are thrown into the mix, it can cause the most reasonable people to act erratically and even maliciously. Curtailing the possibility of feuds and legal battles will protect your heirs and preserve your legacy.