The biggest challenge in estate planning is getting around to making the first one. When you lead a busy life, there will always be matters that seem more pressing.
Once you have created an estate plan, revisiting it and keeping it up to date is simple by comparison. Yet if you do not, it could leave you with an estate plan that is less useful than you realize.
Estate plans need to be current to be effective
Here are some reasons to review your estate plan to see if it needs changes:
- People enter your life: When you marry someone or have a child, you need to rewrite your plan to include them.
- People leave your life: If you divorce, you need to remember to remove your spouse from several places in your estate plan. You may have given them power of attorney to make decisions if you fell ill. They might be the designated beneficiaries on your retirement account.
- Tax laws change: When a different party gains power, they do so on a set of promises which are often diametric to those of the former administration. The constant to-ing and fro-ing can make long-term estate planning challenging. If you fail to keep up to date with the latest changes, you and your family could lose out.
- Your fortunes change: Your estate plan should cover all your assets. If your company has grown since you created your estate plan, you need to update it to reflect this. The same goes if your wealth has diminished. Remember that the amount of wealth also governs which tax laws affect you.
It is a good idea to glance over your estate plan once a year. It allows you to spot if it is out of date for a reason you overlooked.