Updating your estate plan is very important. We recently discussed how it’s generally necessary to do this after you get a divorce. Your spouse may have figured prominently in your estate plan, and it is time to reconfigure things now that you are single – or even entering a new relationship.
This is just one example of when updates are necessary. Below are three more reasons why you may need to update your will and your other estate planning documentation.
The death of a beneficiary
A beneficiary whom you designated to inherit a significant number of your assets may predecease you. Unless you named an contingent beneficiary already, you will need to update your estate plan. The same goes for an executor or other administrator. This is why it’s generally smart to name one or more alternates to prevent minimizing the number of updates you need to make to your plan.
Major asset changes
If your assets change significantly, your estate plan should reflect this. These could be both positive and negative changes. Maybe you sold a business, for example. Perhaps you inherited a large amount of money yourself that you want to pass on to your loved ones after you’re gone.
Changes in your health
Finally, if your health takes a turn for the worse, it’s wise to review your advance healthcare directive (or put one in place if you don’t have one). You also want to make sure you have a reliable health care agent with power of attorney to make decisions that may become necessary if you’re unable to do so.
The important thing to remember is that estate plans often need updates and should not remain static after you have created them. Be sure you know what legal steps to take.
