One of the most responsible decisions you can make to protect your assets and take care of your loved ones, as well as provide for what happens after you pass, is to create an estate plan. Many people think of estate planning as something that only needs to be done once. Still, the reality is that, in addition to establishing an all-encompassing estate plan, keeping it current is equally important. You deal with change throughout your life, and because life does not stand still, neither should your estate plan. If your estate plan becomes outdated, it can create confusion, lead to family disputes, or even result in consequences that are contrary to what you would have intended. Keeping track of changes in your life and reviewing and updating your estate plan regularly will help to ensure that your estate plan remains valid, complies with the law, and reflects your present-day realities.
Life Changes Can Affect Your Estate Planning Goals
Events such as marriage, divorce, the birth (or adoption) of a child, or the death of a family member may have a substantial impact on how and to whom you want your assets to be distributed or in relation to whom you want to designate guardianship of your minor children. For instance, the name of a beneficiary you named many years ago may no longer be consistent with your current wishes. If you do not keep your estate documents updated, your estate will be distributed according to out-of-date instructions. When you experience major life changes, you should review your estate plan to ensure that you have provided your loved ones with the best possible protection and that your current family composition and personal priorities correctly reflect your wishes.
Financial Growth and Asset Changes Require Updates
Your financial condition can change drastically over time; you might acquire real estate, start a business, acquire new investments or assets, receive an inheritance, or build up a considerable savings account. All of these types of changes can affect how complicated and valuable your estate is as a whole. Without an updated estate plan that accurately reflects your new assets, you risk having certain properties not get distributed as you intended. You also risk providing less than full directions regarding all of your assets; that could lead to confusion and complications during the probate process. Keeping your estate plan updated with respect to new acquisitions allows you to address your estate assets appropriately and minimize potential complications during the probate process. Updating allows you to direct how to manage or transfer your estate assets in accordance with your wishes.
Changes in Laws Can Impact Your Estate Plan
Estate planning laws and tax policies can and do change at both levels of government. Changes in laws can affect the tax treatment of estates, the administration of trusts, the designation of beneficiaries, or the laws governing inheritances. Your estate plan that was designed several years ago may no longer be capable of delivering the same tax benefits and protections as it was under the previous law. Periodic reviews by an estate planning attorney will help you stay informed about any changes in the law that could impact your plan. Timely updates of your estate plan will ensure continued compliance with the law and take advantage of available legal and fiscal benefits.
Beneficiary Designations Should Be Reviewed Regularly
Beneficiary designations can determine how your assets are handled at death and play a vital role in your entire estate planning process. Unfortunately, many people do not update beneficiary designations after major events occur in their lives. For example, if you have not updated your beneficiary designation after your divorce or the death of a person that you had originally listed, the person that is currently living and whom you intend to leave your assets to may not receive them, but instead, the ex-spouse or the deceased relative will receive your assets. Therefore, it is important to regularly review and update beneficiary information to avoid disputes and to make sure that your assets will go to the people you originally intended to benefit from them.
The Last Words
While creating an estate plan is an essential first step, it is equally necessary to maintain and update it. Depending on what is occurring in your life, your finances, the law, and your family can affect how your estate planning documents work. Therefore, by regularly reviewing your estate plan and making any required updates with the assistance of a Family Estate Planning Attorney Frisco, TX, you ensure that your intentions are clear, that your loved ones are taken care of, and that your assets will be distributed in accordance with your intentions. An up-to-date estate plan stays as your will and your legacy while protecting the security of those most important to you, well after you are no longer able to provide protection for them.
