Signs It’s Time to Update Your Estate Plan
Did you know that roughly a quarter of people with wills have an obsolete document? Outdated estate plans can cause a lot of confusion and disagreements after you pass away, so it’s important to remember to update your documents regularly. To keep your documents up to date, make sure you go over them after you experience any of these events.
The Addition of New Family Members
If you made a will before a child was born, the child isn’t always automatically included. Depending on how your document is written, new family members might need to be added to the will. It’s also important to update your will if you don’t want to leave anything to the child because otherwise they could challenge the will and say their disinheritance was an oversight. When figuring out how to update estate planning after the birth of a child, make sure to consider what happens if you die while the child is still a minor. In addition to adjusting how your assets are divided, you’ll also need to assign a guardian to your child.
You or a Beneficiary Change Their Marital Status
Marriage is one of the most common reasons for estate plan updates. Since spouses tend to automatically inherit alongside each other, any change to marital status has a big impact on your will. For example, if a child gets married, you might want to specify that they get an item but their spouse does not. It’s also important to adjust your planning in the event of divorces. This can ensure divorced spouses still get assets, or it can keep people who are no longer family members from accessing your funds.
Your Beneficiaries or Executors Die
In the unfortunate event of one of these parties dying, it’s essential to update the will. Otherwise, there can be a lot of confusion over what happens to the allocations you made. One common situation occurs when the testator leaves money to a child who passes away before them. In this case, whether the money is portioned out to the child’s surviving siblings or to the child’s beneficiaries can depend on how the will is worded. Properly updating the will can keep these issues from happening.
Your Financial Status Changes
As you consider when to update your will, don’t forget about any major financial changes. Your estate planning needs to accurately reflect your financial reality. For example, if a stock you had becomes valueless, you might want to adjust your will to ensure one child doesn’t inherit a worthless asset. It’s also necessary to update your will after you get more money because otherwise, your beneficiaries might be confused about who the new assets were supposed to go to.
There are all sorts of laws that affect how you can distribute money and other assets to your beneficiaries. In some cases, legal updates can have an effect on your estate planning. For example, the SECURE Act updated how inherited IRAs work which could affect your will. It is a good idea to speak to your estate planning lawyer any time a law concerning wills, trusts, or inheritances gets passed. These can have an impact on things like estate taxes, so you might want to tweak your estate planning accordingly.
You Move to Another Country
When you move between countries, your estate planning can get a little tricky. Most countries will recognize a will drafted in another country. However, there can be some variations in law that invalidate a will. Furthermore, if your property is in a different country, transferring it can be complicated.
If you need an estate planning lawyer, the Knee Law Firm is here to help. Our New Jersey team can assist you with everything from handling trusts to drafting powers of attorney. To schedule a consultation with us, fill out our online form or give us a call at (201) 996-1200 today.