Let’s get this out of the way: estate planning is not for the rich and famous. In fact, pretty much everyone has some form of an estate. Your estate refers to everything you own: Your home, your car, life’s savings, retirement accounts and personal possessions. Regardless of the size of your estate, one thing is certain: You are never taking it with you when you die.
When you pass on or are incapacitated, you probably want to have control over what happens to your assets. This is where your estate plan comes in. But an estate plan is not a piece of document you create and lock up in some safe to await your passing. An estate plan is a living document that you must update every often or when you go through a major life change.
Here are telltale signs you need to update your estate plan.
When there are changes in your beneficiaries
People come and go in your life. As they do, it is important that you revisit and update your estate plan to reflect these changes. Some of the circumstances that may prompt a change in beneficiaries include:
- Birth or adoption of a beneficiary
Adding or removing beneficiaries from your estate plan ensures that the document does not become the subject of costly and protracted litigation. It also saves your loved ones from a damaging court battle during those grieving times.
When there are changes to your assets
An estate plan addresses what you wish to happen to your assets when you pass on. As such, the assets in question must be in existence. If you have acquired or lost assets since your estate plan’s creation, it is important that you update the document to have a true picture of what you own. The last thing you want is to bequeath assets that no longer exist.
An estate plan allows you to plan ahead, name individuals or organizations you want to inherit your assets and take steps to ensure that your wishes are carried out. However, for your estate plan to serve its purpose, it is to be up to date.