One of the most common mistakes people make with estate planning is failing to update the plan. People will create a plan when they are relatively young, being proactive about planning for their future. However, they will then neglect that plan for decades. When they pass away, their family finds that it barely reflects their current estate or even their family.
So when should you make updates? Here are three times an update, or at least a review, is probably warranted.
When your family changes
Think about ways that your family may change, such as if you get married, divorced or remarried. You also want to think about extended family members, such as if your adult children get married or if grandchildren are born. Some beneficiaries may pass away before you, meaning they need to be removed from the estate plan – especially if there’s no contingent beneficiary listed.
When your estate changes
Consider how your assets may change over the years. Most people acquire more money and other assets over the years. If you buy and sell a significant asset like your home, it’s also important to make sure your estate plan reflects your current property.
When your health changes
Your estate plan can do more than just distribute assets. You can also make medical decisions with a living will or an advance directive for health care. If you are diagnosed with a serious disease or have other major health changes, it may be time to update your plan.
If you have been neglecting your estate plan, it is not too late to modify it. Just be sure you know what legal steps you will need to take.