It Is Important to Update Your Estate Plan

Many individuals who have created a will, power of attorney for health care, financial power of attorney, and living will assume their estate planning work is complete. However, this is only half the battle. Estate plans require regular review and updates due to various life changes and legal developments.

Key Reasons to Update Your Estate Plan

New Family Members

The arrival of new children or grandchildren necessitates estate plan revisions. Without updates, newly born children may receive unintended distributions or no inheritance at all. For example, if Jane Doe’s estate specifies that her home goes to her firstborn son and the remaining assets are divided with set percentages, a third child born later could receive nothing, potentially causing family conflict.

Relocation to a Different State

Moving to another state can significantly impact your estate plan. Property ownership laws differ between “common law” and “community property” states. It is essential to clarify whether property should be held separately or jointly when relocating.

State Tax Considerations

Some states maintain inheritance or estate taxes that apply at lower thresholds than federal exemptions. Understanding these implications helps prevent unexpected tax liabilities for heirs.

Changes in Power of Attorney and Medical Directives

Power of attorney laws and advance directive requirements vary by state. Medical planning documents should reflect your current state’s specific legal requirements.

Major Asset Changes

Selling or purchasing significant assets can alter estate plan outcomes. Properties that have appreciated substantially may trigger larger estate taxes, potentially reducing what beneficiaries receive.

Retirement Account Growth

If retirement accounts such as 401(k)s, IRAs and pensions have become your largest assets, reviewing beneficiary designations and tax implications becomes critical.

Sibling Inheritance Considerations

When unmarried siblings are included in estate plans, one sibling may eventually become the sole survivor holding most assets. Additionally, beneficiaries may pass away before the estate owner.

Changes in Marital Status

Single individuals and married couples require different estate planning approaches. Divorced individuals who do not update beneficiary designations on retirement accounts and insurance policies may inadvertently leave assets to former spouses.

Executor Changes

If your named executor passes away before you do, a successor executor must be designated. Having multiple candidates ensures continuity.

Recommended Timeline

Estate plans are affected by asset value fluctuations, family changes, and shifts in federal and state law. Meeting with your estate planning attorney every three to five years ensures your plan continues to reflect your intentions and circumstances.

If you or a loved one needs assistance with elder law, probate or estate planning issues, do not hesitate to contact us. We are here to help.